Potential Illinois Tax Law to END Amazon Associates Program for Illinois Residents

by jaxpot
243 replies
Sorry if this is in the wrong place guys... or if there are already threads about this. I saw a few old ones for other states, but didn't see anything for Illinois yet.

:confused:

I just received an email from Amazon about them ending the associates program for Illinois residents.

YIKES! I only started my efforts with Affiliate Marketing this year, but I've had some some success, and I certainly planned on doing this for a long time to come. And my main focus right now is promoting Amazon products!!!

And (obviously) I am an Illinois resident, so I'm freakin'!

Below is the letter from Amazon regarding this potential Illinois tax law that Gov. Quinn may sign into law.

So, if this law passes... what can we do to continue with the Amazon associates program? Simply change our address on record to a friend's/relative's address out-of-state?

Any insights/experience on this situation would be great.





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Greetings from the Amazon Associates Program:



We regret to inform you that the Illinois state legislature has passed an unconstitutional tax collection scheme that, if signed by Governor Quinn, would leave Amazon.com little choice but to end its relationships with Illinois-based Associates. You are receiving this email because our records indicate that you are a resident of Illinois. If our records are incorrect, you can manage the details of your Associates account here.



Please note that this not an immediate termination notice and you are still a valued participant in the Amazon Associates Program. But if the governor signs this bill, we will need to terminate the participation of all Illinois residents in the Associates Program. After that point, we will no longer pay any advertising fees for sales referred to amazon.com, endless.com and smallparts.com nor will we accept new applications for the Associates Program from Illinois residents.



The unfortunate consequences of this legislation on Illinois residents like you were explained to the legislature, including Senate and House leadership, as well as to the governor's staff.



Over a dozen other states have considered essentially identical legislation but have rejected these proposals largely because of the adverse impact on their states' residents.



Governor Quinn's office may be reached here.



We thank you for being part of the Amazon Associates Program, and wish you continued success in the future.



Sincerely,
Amazon.com
---
#affiliates #alright #amazon #asset #associates #corp #day #end #free #illinois #law #money #potential #program #protection #residents #sad #setups #tax #waiting #warriors
  • Profile picture of the author tpw
    Some people are getting around it by incorporating in other states, and setting their business address to the other state.


    p.s. Just an observation based on stories I have heard. I am not an attorney, nor do I play one on the Internet.
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    • Profile picture of the author CDarklock
      Originally Posted by tpw View Post

      Some people are getting around it by incorporating in other states, and setting their business address to the other state.
      For those who may be considering this...

      Alaska, Delaware, Montana, New Hampshire, and Oregon have no state sales tax.

      Delaware also has extremely attractive corporate laws.
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      • Profile picture of the author Jake Gray
        Originally Posted by CDarklock View Post


        Delaware also has extremely attractive corporate laws.
        Good information.

        If you have one in Delaware, you are not subject to paying taxes if you are operating your business out of Delaware.
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      • Profile picture of the author tpw
        Originally Posted by CDarklock View Post

        For those who may be considering this...

        Alaska, Delaware, Montana, New Hampshire, and Oregon have no state sales tax.

        Delaware also has extremely attractive corporate laws.

        Which means these states will never experience the Amazon shutout...

        The entire issue with these states has to do with Sales Tax legislation, as is described here.
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      • Profile picture of the author paulie888
        Originally Posted by CDarklock View Post

        For those who may be considering this...

        Alaska, Delaware, Montana, New Hampshire, and Oregon have no state sales tax.

        Delaware also has extremely attractive corporate laws.
        Let's not forget Nevada as well, and Texas. I know of several big internet marketers who seem to be strongly indicating that Nevada is one of the better states to set up an LLC in for internet marketing purposes.
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        • Profile picture of the author TheWealthSquad
          One item I think has been missed in the discussion of using a corporation set up in another state.

          It is not for the purpose of avoiding paying income tax. It is for the purpose of remaining an Amazon affiliate.

          So you have a Nevada corporation set up (just as an example). You use that address as your affiliate address with Amazon. They like Nevada so allow you to participate in their program.

          They send your company commission checks. The company then issues you a check (depending on the type of corporation determines the type of check but that is a discussion for another day).

          You then report that income to your state and pay a state income tax on it.

          They don't can't make Amazon have a nexus in your state because it is dealing with your corporation in another state. You are paying income tax on the revenue generated by the business.

          It is a pain but is legal and does work. You just have to remember the REASON you are doing it. It isn't to avoid taxes but to remain as an affiliate of Amazon.

          When you deal with politicians, always remember they make the rules so play by them as much as possible.
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        • Profile picture of the author kindsvater
          Originally Posted by paulie888 View Post

          Let's not forget Nevada as well, and Texas. I know of several big internet marketers who seem to be strongly indicating that Nevada is one of the better states to set up an LLC in for internet marketing purposes.
          You're confusing sales tax with income tax. Those states do not have an income tax, but they do collect a sales tax.
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    • Profile picture of the author donhx
      Originally Posted by tpw View Post

      Some people are getting around it by incorporating in other states, and setting their business address to the other state.
      This won't work I'd say, and definitely requires the opinion of a lawyer. Virtually all states require a corporation registered in another state to register in the home state as a "foreign corporation" in order to operate there. As a "foreign corporation" you pay the same taxes as if that was home base for your corporation.

      It will take tax authorities about two seconds to determine that you are trying to evade taxes by having a shell corporation in another state. Then, there is the issue of the paycheck you get from your shell corporation... that is evidence that your corporation has a "brick and mortar" presence in the state where you live anyway.

      A fair deal on taxes doesn't start with incorporation. It starts at the ballot box.
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      • Profile picture of the author tpw
        Originally Posted by donhx View Post

        This won't work I'd say, and definitely requires the opinion of a lawyer. Virtually all states require a corporation registered in another state to register in the home state as a "foreign corporation" in order to operate there. As a "foreign corporation" you pay the same taxes as if that was home base for your corporation.

        It will take tax authorities about two seconds to determine that you are trying to evade taxes by having a shell corporation in another state. Then, there is the issue of the paycheck you get from your shell corporation... that is evidence that your corporation has a "brick and mortar" presence in the state where you live anyway.

        A fair deal on taxes doesn't start with incorporation. It starts at the ballot box.

        Not to be contrary -- just a question.

        {I did edit my original post to include a disclaimer to the effect that I am not an attorney, nor do I play one on the Internet.}

        If someone lives in Illinois and registers a corporation in Delaware for example. And instead of showing the registrant as an employee living in the State of Illinois, as most of these corporate setups do, suppose the employee was a consultant instead?

        The reason I ask is that if I am a consultant for a company in another state, I am not officially an employee, and officially the corporation does not have a presence in my state because I am a consultant rather than an employee.
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        • Profile picture of the author donhx
          Originally Posted by tpw View Post

          Not to be contrary -- just a question.

          {I did edit my original post to include a disclaimer to the effect that I am not an attorney, nor do I play one on the Internet.}

          If someone lives in Illinois and registers a corporation in Delaware for example. And instead of showing the registrant as an employee living in the State of Illinois, as most of these corporate setups do, suppose the employee was a consultant instead?

          The reason I ask is that if I am a consultant for a company in another state, I am not officially an employee, and officially the corporation does not have a presence in my state because I am a consultant rather than an employee.
          I'm not a lawyer either, but been there done that, and have a blood stained tee shirt to prove it. California, for example, has such horrific business-crushing laws that many people want to live there and receive their income from a shell corporation they create in Nevada, which is a business friendly state. But it doesn't work because all the tax people have to see is the funds coming from a Nevada corp into your account (source of income is on the tax form), question your relationship with it, and they say you need to register in California. This same scenario is played out in other states too.

          The problem you identify (employee/consultant status) is really only part of the picture. Who are the directors/officers of the corporation? You are, if you want any profits from it. If you put your corporation in the the hands of lawyers or strangers to hide your your ownership, you lose the many benefits of having a corporation. Of course, it is also both expensive and risky to hide your role , and is really rather pointless. It could easily cost more than the taxes in most cases.

          If people check with a lawyer, I think they will find that the tax people have the game figured out already. It is definitely not something one would do to protect their Amazon affiliate status.
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      • Profile picture of the author Dave Rodman
        Banned
        Originally Posted by donhx View Post

        This won't work I'd say, and definitely requires the opinion of a lawyer. Virtually all states require a corporation registered in another state to register in the home state as a "foreign corporation" in order to operate there. As a "foreign corporation" you pay the same taxes as if that was home base for your corporation.

        It will take tax authorities about two seconds to determine that you are trying to evade taxes by having a shell corporation in another state. Then, there is the issue of the paycheck you get from your shell corporation... that is evidence that your corporation has a "brick and mortar" presence in the state where you live anyway.

        A fair deal on taxes doesn't start with incorporation. It starts at the ballot box.
        I don't see how that would matter. You're not trying to evade taxes...many affiliate are setup as S-Corps, which reports/pays taxes on their personal tax returns (IL in this case). So as long as you pay the state income tax on the revenue earned from the out of state corporation, I don't see how you could have a problem.

        The only people you have to "fool" is Amazon, not the State taxing authority. It's not your problem that Amazon didn't collect taxes on a sale.
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      • Profile picture of the author Momcat1
        Spot on! My LLC is registered in Wyoming...but I live in central Illinois. I've been dumped by Amazon too and can't do a thing about for the very reasons you mention. Tax evasion? Ummm, no thanks...I don't look good in stripes OR bright orange jumpsuits

        Originally Posted by donhx View Post

        This won't work I'd say, and definitely requires the opinion of a lawyer. Virtually all states require a corporation registered in another state to register in the home state as a "foreign corporation" in order to operate there. As a "foreign corporation" you pay the same taxes as if that was home base for your corporation.

        It will take tax authorities about two seconds to determine that you are trying to evade taxes by having a shell corporation in another state. Then, there is the issue of the paycheck you get from your shell corporation... that is evidence that your corporation has a "brick and mortar" presence in the state where you live anyway.

        A fair deal on taxes doesn't start with incorporation. It starts at the ballot box.
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  • Profile picture of the author remodeler
    Just got the notice as well, and it would have a huge effect on my income. Time to get set up in another area. I knew this was in the talking stages several months ago, but see it is now passing. Looks like it is just a matter of a couple of days before Amazon pulls the plug here.
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  • Profile picture of the author Lazy
    I would advise you to form an LLC in a different state. Just get a PO box in michigan or something.
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    • Profile picture of the author jaxpot
      Is it necessary right away to form an LLC or some corporation / business entity? I've just been operating as an "individual" I guess....


      Thanks
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      • Profile picture of the author Lazy
        Originally Posted by jaxpot View Post

        Is it necessary right away to form an LLC or some corporation / business entity? I've just been operating as an "individual" I guess....


        Thanks
        You don't have to do it right away, but i'd do it as soon as possible.

        Another benefit of having an LLC is that it can act as a figurehead for other online ventures, should you choose to pursue them.
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  • Profile picture of the author Launchevity
    Yeah I'm freaking out a little bit here too. Hmmm perhaps I need to move to Indiana. LOL!
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  • Profile picture of the author mporgsoft
    Can someone point me to the specific legislation they are talking about? I do not understand from the email from Amazon why they would stop allowing associates because of a tax law.
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    • Profile picture of the author CDarklock
      Originally Posted by mporgsoft View Post

      Can someone point me to the specific legislation they are talking about?
      There's a pattern in these laws the states are passing.

      Basically, they are saying that if John lives in Illinois, and he is an Amazon affiliate, then Amazon is legally required to collect state sales tax from the customers John refers to them.

      Amazon is not really bothered by the sales tax thing, but they are bothered by the reality that this requires massive refitting of the affiliate system and could eventually mean they have to file state tax returns in all fifty states.

      So what Amazon is doing is saying "We're not going to collect sales tax for you. So if your state makes a law that we have to collect sales tax, we're going to stop paying you."

      And the people in charge will hear about it. Of course, this is the third or fourth state to do this, and the others sure as hell didn't care.
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      • Profile picture of the author Rich Struck
        Originally Posted by CDarklock View Post

        Amazon is not really bothered by the sales tax thing, but they are bothered by the reality that this requires massive refitting of the affiliate system and could eventually mean they have to file state tax returns in all fifty states.
        And not just states but countless little tax districts as well. Good luck keeping track of all of that.
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      • Profile picture of the author nubchai
        Originally Posted by CDarklock View Post

        There's a pattern in these laws the states are passing.

        Basically, they are saying that if John lives in Illinois, and he is an Amazon affiliate, then Amazon is legally required to collect state sales tax from the customers John refers to them.

        Amazon is not really bothered by the sales tax thing, but they are bothered by the reality that this requires massive refitting of the affiliate system and could eventually mean they have to file state tax returns in all fifty states.

        So what Amazon is doing is saying "We're not going to collect sales tax for you. So if your state makes a law that we have to collect sales tax, we're going to stop paying you."

        And the people in charge will hear about it. Of course, this is the third or fourth state to do this, and the others sure as hell didn't care.
        Big Box stores were evidently lobbying heavily for this legislation in Illinois. Walmart and Sears are inviting people to join their affiliate programs lol.
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  • Profile picture of the author kindsvater
    California, with a new Democratic governor will probably not be far behind now that Schwarzenegger won't be vetoing a similar law.

    Then the issue will really hit the fan. Not just for Amazon, but past California bills could have required any merchant going through a California affiliate network (CJ and Google Affiliate) to owe California sales tax.

    So then it may not matter where you reside - if you are using a California affiliate network.

    And of course at some point it doesn't make sense for Amazon to continue with an affiliate program. Real hard to lose California, where 1 of 8 Americans live, and still be viable. Combine that with Illinois and New York and there is a huge chunk of the population.

    If you're relying on Amazon affiliate income I'd be concerned regardless of where you live.
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    • Profile picture of the author donhx
      Originally Posted by kindsvater View Post

      California, with a new Democratic governor will probably not be far behind now that Schwarzenegger won't be vetoing a similar law.

      Then the issue will really hit the fan. Not just for Amazon, but past California bills could have required any merchant going through a California affiliate network (CJ and Google Affiliate) to owe California sales tax.

      So then it may not matter where you reside - if you are using a California affiliate network.

      Slightly off topic, but California has a proposal that will probably pass under Brown. It requires that people pay sales tax on on services as well as goods. So, if you are an architect, consultant or build web sites or whatever, you will have to charge the prevailing rate (about 8% at the moment) for the work you do.

      Amazon is on solid ground--it is against the Federal Interstate Commerce Act to charge sales tax if you do not have a brick and mortar presence in that state. However, states are so desperate they are saying an affiliate is a brick and mortar presence. One day this issue will probably be decided by the Supreme Court.

      In the meantime, if Amazon wants affiliates, it will have to start paying taxes in the states demanding it, at least until the matter is settled in court.
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      • Profile picture of the author remodeler
        Originally Posted by donhx View Post

        In the meantime, if Amazon wants affiliates, it will have to start paying taxes in the states demanding it, at least until the matter is settled in court.
        That's the thing... isn't Amazon at the point now that they really don't need affiliates? They've built up such a trust and presence online that they can survive just fine without us. So with IL and other states rigth behind them, they may very well scrap all affiliates. Who knows...
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      • Profile picture of the author jaysolution
        Anyone incorporated outside of their state? If so, which state did you choose? What did you use as an address?

        Also what does "must legally operate withing the state" mean to a company that makes money from affiliate sales?

        One last question. Is anyone else blacklisting states that tax affiliate sales?
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        • Profile picture of the author Lazy
          Originally Posted by jaysolution View Post

          Anyone incorporated outside of their state? If so, which state did you choose? What did you use as an address?

          Also what does "must legally operate withing the state" mean to a company that makes money from affiliate sales?

          One last question. Is anyone else blacklisting states that tax affiliate sales?
          I do. Use one of the states that doesn't have sales tax. I use oregon, because it borders my home state of california, and i had to go set up my po box in person.
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      • Profile picture of the author James Hussey
        Originally Posted by donhx View Post

        Amazon is on solid ground--it is against the Federal Interstate Commerce Act to charge sales tax if you do not have a brick and mortar presence in that state. However, states are so desperate they are saying an affiliate is a brick and mortar presence. One day this issue will probably be decided by the Supreme Court.
        Um...it WAS decided in 1992 by the Supreme Court - that's the stupid thing.
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    • Profile picture of the author blogginvixen
      Originally Posted by kindsvater View Post

      California, with a new Democratic governor will probably not be far behind now that Schwarzenegger won't be vetoing a similar law.

      Then the issue will really hit the fan. Not just for Amazon, but past California bills could have required any merchant going through a California affiliate network (CJ and Google Affiliate) to owe California sales tax.

      So then it may not matter where you reside - if you are using a California affiliate network.

      And of course at some point it doesn't make sense for Amazon to continue with an affiliate program. Real hard to lose California, where 1 of 8 Americans live, and still be viable. Combine that with Illinois and New York and there is a huge chunk of the population.

      If you're relying on Amazon affiliate income I'd be concerned regardless of where you live.
      You hit the nail on the head! California is not too far behind...and take this from someone whose husband works for the California State Legislature. I believe my husband mentioned something about the "Nexus law."

      I haven't researched it too much only because I don't promote Amazon heavily, however, that doesn't mean it will not apply to affiliate programs like Google, etc.
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  • Profile picture of the author jaxpot
    Wow, this is a nightmare. Thanks guys for the "reasoning" behind this issue.

    If I understand this accurately, then this would not just be for Amazon, right? If I'm an affiliate with an Illinois address, wouldn't ANY affiliate program be subject to collecting sales tax from any sales referred by me?

    Ugh.
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    • Profile picture of the author kindsvater
      Originally Posted by jaxpot View Post

      Wow, this is a nightmare. Thanks guys for the "reasoning" behind this issue.

      If I understand this accurately, then this would not just be for Amazon, right? If I'm an affiliate with an Illinois address, wouldn't ANY affiliate program be subject to collecting sales tax from any sales referred by me?

      Ugh.
      Not necessarily. I have not read the Illinois law, but often these laws have dollar threshold amounts so that they target Amazon but not a mom and pop website with an affiliate problem.
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    • Profile picture of the author CDarklock
      Originally Posted by jaxpot View Post

      If I understand this accurately, then this would not just be for Amazon, right? If I'm an affiliate with an Illinois address, wouldn't ANY affiliate program be subject to collecting sales tax from any sales referred by me?
      Technically, yes, but those of us who deal only in digital products have a slight advantage.

      First, purely digital products frequently are not taxable at all. So in most cases, there is no tax.

      Second, we do not need to ship anything to our customers, so we do not need their physical address. This makes it impossible to identify the edge cases where tax may be owed.

      Third, if one does not pay sales tax on a taxable item, it is usually a state law that you have to track the expense and pay the sales tax you owe on it at the end of the year.

      So we probably don't need to collect tax, if we do there's no way for us to know, and in the end it's the customer's responsibility anyway.
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  • Profile picture of the author Biggy Fat
    Colorado, Rhode Island, North Carolina, and now Illinois. Yipe.
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  • Profile picture of the author Dave Rodman
    Banned
    I'm in IL too so I feel your pain.

    I really think that the idiots in charge of this state think that if they increased taxes by 5x, that they'd 5x the revenue. No wonder Indiana is looking more attractive every day.
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  • Profile picture of the author Marvin Johnston
    I just noticed the Perry Marshall put out a post on his blog about this. AND he is urging everyone to write the governor of Illinois opposing the legislation.

    Instead of being fatalistic, it might help to be proactive and continue that type of campaign to educate people as to the stupi, er, errors inherent in this type of legislation.

    Being prepared in case it passes is a good thing, but putting up a good case to stop it from passing would be a better thing!

    Of course, it is possible that the people who would be affected are not real marketers .

    Marvin
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    • Profile picture of the author petevamp
      If this passes I will be contacting a friend of mine in vegas and asking them to let me use their address as my home location just for my affiliate programs. What pisses me off the most about this is the fact it will be basically laying off several thousand more illinois workers/taxpayers for no gain what so ever. Illinois laws have always been about making way for big business but never before has it been to destroy the little guy trying to make aliving.

      Then for amazon to say they will be canceling assosiates who live in illinois just because of this legislation is outrageous. No government anywhere should be able to tax a person just because the person who directed them to the site lived in a certain state. Tax the individuals who are the purchasers living in that state fine but to tax an individual just because the person trying to sell the product lives in that state is simply outragous.

      I can tell you this if they do pass this bolarki Not only will I be moving out of the state. I will never pay any taxes to this state ever again. Atleast blogo was trying to line his pocket from individuals who already had the money to be ripped off. Where as quinn is trying to line is pocket by punishing anyone and everyone who purchases anything from the sate.

      As I stated I see nothing wrong with them adding a tax to purchasers from illinois but to tax someone the state tax just because an illinois resident sent them their to purchase something is outrageous. Wasn't quinns thing I will not raise taxes I will give to the little guy and I will lower the illinois deficit. How the hell is this going to work for any of this.
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      • Profile picture of the author K Kumar
        I didn't get this e-mail and I'm in Illinois? I REALLY hope this doesn't go through. I just started with their associate program and was being successful! This blows! I'm gonna show Quinn why they call me the man of steel.
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        • Profile picture of the author kmitz05
          I just started on amazon as well...guess it wasn't meant to be. Back to square one. Lots of time and effort down the drain. Thanks Quinn
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    • Profile picture of the author Julie McElroy
      Originally Posted by Marvin Johnston View Post

      I just noticed the Perry Marshall put out a post on his blog about this. AND he is urging everyone to write the governor of Illinois opposing the legislation.

      Instead of being fatalistic, it might help to be proactive and continue that type of campaign to educate people as to the stupi, er, errors inherent in this type of legislation.

      Being prepared in case it passes is a good thing, but putting up a good case to stop it from passing would be a better thing!

      Of course, it is possible that the people who would be affected are not real marketers .

      Marvin
      I actually did this in CO - I wrote my governor - no response though of course. But, yes by all means! I think we need some type of viral campaigning on a BIG BLOG site! "Why hurt the entrepreneurs?" In this economy, why do you want to crush the small businesses who are trying to make a measly 4-8% commission! It is pretty ridiculous!

      As far as changing states and being deceitful, that seems risky if it catches up with you. The option may be to just look at other affiliate sites - I know Amazon is the BIG one though!
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      • Profile picture of the author petevamp
        Originally Posted by Julie McElroy View Post

        I think we need some type of viral campaigning on a BIG BLOG site!
        The big blog sites have already started. More people need to hit it up on the larger sites like twitter, facebook, myspace, dig, youtube and pretty much every site you can think of. Everyone in every state in the country should be fighting this one not just the illinois residence. Heck as much as I do not klike obama I say even start flooding him with letters as well. He would actually have the ability to do something about it in one way or another.
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        • Profile picture of the author petevamp
          Enjoy this bit of reading here. Outragous I say Out Fing Ragous

          For Immediate Release Contact January 5, 2011 David Mack 202-607-1155
          Illinois Affiliate Tax Will Harm Small Businesses and Reduce Tax Revenue State poised to enact legislation that has failed in other states
          (Washington, D.C.) - The Illinois State Senate is on track to adopt a new tax provision that will reduce state tax revenue and harm small businesses. Passage of the so called "Amazon Tax" included in Senate Amendment 3 to HB 3659 would require out-of-state retailers to collect Illinois sales tax if customers were referred by any website operated by Illinois businesses or residents. Illinois would only worsen its budget gap if this became law. "In other states that have tried this approach, including North Carolina and Rhode Island, large online e-retailers who pay affiliate commissions simply canceled their affiliate programs," said Steve DelBianco, executive director of NetChoice. "The same reaction will undoubtedly happen in Illinois, resulting in no new sales tax for the state. Worse, the lost affiliate commissions would mean that those Illinois small businesses would pay lower state income taxes." It's all pain and no gain, which is exactly what happened in other states that passed similar laws. What should Illinois lawmakers do to close their budget gap? Illinois legislators and tax collectors should instead look for ways to collect sales tax that's already due under current law. The fastest growing online sales are happening at retailers who also have local stores where shoppers can see merchandise and easily return or exchange items they bought online. A recent economic study <http://www.netchoice.org/library/new-estimate-of-uncollected-taxes-from-e-commerce/> showed that 22 of the top 25 e-retailers (and 82 of the top 150) already have stores in Illinois. That includes e-retailers where Illinois consumers did a lot of their Christmas shopping, like Apple, Victoria's Secret, Williams & Sonoma, Eddie Bauer, and LL Bean. Illinois lawmakers should ensure that these retailers are already collecting sales tax on sales to Illinois residents. That makes infinitely more sense than passing a new law that brings in no revenue while slashing commissions earned by small businesses in Illinois. NetChoice is an advocacy organization that fights threats to online commerce and promotes policies that protect Internet innovation and communication on a state, federal and international basis. The Washington, DC-based group protects Internet commerce-driven competition and battles rules that hinder consumer choice and hurt small businesses. For more information, see NetChoice <http://www.netchoice.org/>.
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  • Profile picture of the author Julie McElroy
    Colorado does this too! It can be very frustrating! I also have an Illinois residency - since that is where I am from - so now what?? Besides creating an LLC, is there another option?
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    • Profile picture of the author petevamp
      Originally Posted by Julie McElroy View Post

      Colorado does this too! It can be very frustrating! I also have an Illinois residency - since that is where I am from - so now what?? Besides creating an LLC, is there another option?
      Yea that other option is move to canada or out of america all together. We all know that when a few states do anything in america they all seem to do it. It may take a few more years for the other states but it will happen everywhere and there is nothin you can do about it. If you are not a big business you are pretty much screwed either way.
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      • Profile picture of the author Julie McElroy
        Originally Posted by petevamp View Post

        Yea that other option is move to canada or out of america all together. We all know that when a few states do anything in america they all seem to do it. way.
        Yep, I think there are 4 or 5 states now, including ILLINOIS!
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  • Profile picture of the author tpw
    What is wrong with this situation is not so much the taxation, but the legislation.

    Isn't it true that residents of certain states must pay taxes on all physical goods they purchase online?

    I don't remember the states, but I am pretty sure I have seen some sites say that residents of certain states must pay sales taxes on all purchases.

    The states that are getting blocked by Amazon seem to me to be going after the affiliates, as a silly way around charging taxes on some transactions their residents make.

    By playing this way, it appears to me to be more like smoke and mirrors -- a way to raise taxes without residents realizing that their taxes have been raised....

    I don't know... Just saying...
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    • Profile picture of the author petevamp
      Originally Posted by tpw View Post

      What is wrong with this situation is not so much the taxation, but the legislation.

      Isn't it true that residents of certain states must pay taxes on all physical goods they purchase online?

      I don't remember the states, but I am pretty sure I have seen some sites say that residents of certain states must pay sales taxes on all purchases.

      The states that are getting blocked by Amazon seem to me to be going after the affiliates, as a silly way around charging taxes on some transactions their residents make.

      By playing this way, it appears to me to be more like smoke and mirrors -- a way to raise taxes without residents realizing that their taxes have been raised....

      I don't know... Just saying...
      Yes certain states like cali have to pay taxes no matter what on any purchase they make. What makes this different is they want to tax individuals from other states just because an illinois resident sent them to the product page. So amazon would have be forced to charge everyone the illinois state tax on purchases even if they are not an illinois resident. Take a look at the pr I pasted above it goes into a little bit more detail.
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    • Profile picture of the author PhoebeSmellyCat
      This makes me rather nervous.

      We went through the same thing but our good old Gov. Lingle vetoed the bill.
      You could almost hear the collective sigh of relief by all the resident affiliates here. But now that we have a new governor, who knows what will happen in the next few years?

      I think it's time I start looking into other areas of IM although I do like promoting Amazon...
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      • Profile picture of the author petevamp
        Originally Posted by PhoebeSmellyCat View Post

        This makes me rather nervous.

        We went through the same thing but our good old Gov. Lingle vetoed the bill.
        You could almost hear the collective sigh of relief by all the resident affiliates here. But now that we have a new governor, who knows what will happen in the next few years?

        I think it's time I start looking into other areas of IM although I do like promoting Amazon...
        I wouldnt be so peed off right now but I just started a new site today promoting amazon products just to get that email saying I may lose my ability to make money with amazon all together. My only concern is wouldnt this also effect other affiliate sites like clickbank which is my main money maker at the moment.
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      • Profile picture of the author steveblum
        I live in Illinois and as far as I know, no such law exist in this state, YET! It has to do with sales tax of tangible goods.

        I actually called the Illinois Department of Revenue to ask how taxes were handled with e-books because I came across a court ruling stating that e-books were NOT tangible items. They confirmed this to be true.

        So for all of you Illinoisans who may have been wondering: You can sell e-books online, without setting up a sole prop, and it's perfectly legal.

        I know a few other states have passed such rulings against Amazon, but there are ways around everything. So keep your head up high and find your options.
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        • Profile picture of the author PhoebeSmellyCat
          Why is it just Amazon? :confused:
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          • Profile picture of the author nimcus38318
            Originally Posted by PhoebeSmellyCat View Post

            Why is it just Amazon? :confused:
            This is indeed the question. When they unceremoniously dumped the affiliates in Colorado, I kind of took it in the shorts. Other online companies, most notably Clickbank, have taken the Colorado law in stride and done what Amazon should do. They ask my zip code when I make a purchase and add the sales tax right there and then. This ends up costing the RIGHT person, the one who made the purchase.

            What Amazon is doing is BS. They are refusing to "cave" to state laws. But the really stupid thing is that they punish their affiliates, NOT the buyers from Colorado. It really is just a pissing contest and so far, everyone wins but the mom and pop affiliates. I try NEVER to buy anything from Amazon if I can possibly avoid it just because they were so callous about taking income away from people who were really just trying to make a profit just like Amazon is.
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        • Profile picture of the author petevamp
          Originally Posted by steveblum View Post

          I live in Illinois and as far as I know, no such law exist in this state, YET! It has to do with sales tax of tangible goods.

          I actually called the Illinois Department of Revenue to ask how taxes were handled with e-books because I came across a court ruling stating that e-books were NOT tangible items. They confirmed this to be true.

          So for all of you Illinoisans who may have been wondering: You can sell e-books online, without setting up a sole prop, and it's perfectly legal.

          I know a few other states have passed such rulings against Amazon, but there are ways around everything. So keep your head up high and find your options.
          That is not the issue. The issue is how many people is our government going to basically lay off just to raise taxes. Not only that but what gives them the right to charge you a illinois state sales tax just because an illinois resident sent you to the site as amazon. Also it is the fact they want to hurt the little guy for trying to make a living selling legit products. Where yes I can make an ebook in a few hours and charge 10-50$ for each book. You still on the other hand do not get 100000000 of products to sell that you are assured they are legit and not some scam. I can make more sales through amazon then I can on a site like click bank or pay pal. Not to mention selling ebooks unless you buy resale rights to the ebooks you have to spend hours creating them and you will otherwise only have one or 2 products per page.

          The new law they are trying to pass will also change that whole ebook issue you are talking about. Anyone from ILLINOIS who buys your ebook would have to pay the 6% state sales tax plus if you are having affiliates selling your ebooks for you then you would have to charge the purchaser the illinois state sales tax even if the purchaser lived in china. This is why amazon is saying they will be shutting down illinois assosiates accounts.

          Read this PR and you will see what I am talking about http://www.netchoice.org/wp-content/...ss-release.pdf
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          • Profile picture of the author steveblum
            Originally Posted by petevamp View Post

            That is not the issue. The issue is how many people is our government going to basically lay off just to raise taxes. Not only that but what gives them the right to charge you a illinois state sales tax just because an illinois resident sent you to the site as amazon. Also it is the fact they want to hurt the little guy for trying to make a living selling legit products. Where yes I can make an ebook in a few hours and charge 10-50$ for each book. You still on the other hand do not get 100000000 of products to sell that you are assured they are legit and not some scam. I can make more sales through amazon then I can on a site like click bank or pay pal. Not to mention selling ebooks unless you buy resale rights to the ebooks you have to spend hours creating them and you will otherwise only have one or 2 products per page.

            The new law they are trying to pass will also change that whole ebook issue you are talking about. Anyone from ILLINOIS who buys your ebook would have to pay the 6% state sales tax plus if you are having affiliates selling your ebooks for you then you would have to charge the purchaser the illinois state sales tax even if the purchaser lived in china. This is why amazon is saying they will be shutting down illinois assosiates accounts.

            Read this PR and you will see what I am talking about http://www.netchoice.org/wp-content/...ss-release.pdf

            Thanks for the insight. I hadn't checked the news and just found out about this. I know in the other states where this has happened people could request a workaround.

            Unfortunately, it seems like the states are trying to shut these down to. I'll have to read the proposed legislation again but according to the IDOR any business ONLY pays sales tax if someone in Illinois buys their product.

            So if I sold an e-book to someone in Chicago then I would be responsible for sales tax. But across state lines is a federal issue.

            The sad part is I know Quinn is going to sign this into law. I knew it was just a matter of time before Illinois lawmakers sunk their teeth into this one.

            It sucks, but that's the way it goes. I will just have to make adjustments. I really feel bad for the companies who are selling tons of merchandise through Amazon located in Illinois - they are getting it the worst.
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          • Profile picture of the author steveblum
            Originally Posted by petevamp View Post

            The new law they are trying to pass will also change that whole ebook issue you are talking about.
            Just thought I'd hit this one real quick. An e-book is not considered a tangible product, which means you can't "technically" hold it in your hand and admire it.

            So in other words by transferring digital information, for a fee, to someone else they have their hands tied.

            If a law was passed to try to place a sales tax on an intangible item, which this is America you never know, it would effect every corner of the Internet.
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            • Profile picture of the author petevamp
              Originally Posted by steveblum View Post

              Just thought I'd hit this one real quick. An e-book is not considered a tangible product, which means you can't "technically" hold it in your hand and admire it.

              So in other words by transferring digital information, for a fee, to someone else they have their hands tied.

              If a law was passed to try to place a sales tax on an intangible item, which this is America you never know, it would effect every corner of the Internet.
              I have not been able to locate anything on this other then hear say so far. From what I have gathered though is that it was a closed door meeting and nothing has been released other then what was stated about amazon affiliates and sales. I am sure there is a whole lot more to it then just the whole amazon thing but nothing has been made public other then that so far. From what I have gathered though they want to put a tax on any and all online products whether it is a physical product or a digital product. As I said earlier though atleast blogo was going after indivuals and not an entire country. As bad as blogo was I would much rather have him in their than that rat BLEEP Quinn.
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            • Profile picture of the author petevamp
              Originally Posted by steveblum View Post

              Just thought I'd hit this one real quick. An e-book is not considered a tangible product, which means you can't "technically" hold it in your hand and admire it.

              So in other words by transferring digital information, for a fee, to someone else they have their hands tied.

              If a law was passed to try to place a sales tax on an intangible item, which this is America you never know, it would effect every corner of the Internet.
              Here is a little more on what is actually going on behind closed doors and why they want to keep it so secrete. Nexus - Tax Nexus

              As you will see it does not matter if it is a tanagle item or not if this bill passes all illinois affiliates will be completely out of work. Now I do not know about you but the only reason why I turned to this in the first place was because I was out of work and running out of money rather fast. SO I decided to give this a try and I am glad I did for I have done rather well. It wasn't untill late late last year that I started pushing the amazon income so I am a little behind others.

              However I have gone from making nothing from amazon to making over 150 a day with amazon in a few short months. That is just from 4 amazon adsense sites. Before everything was from clickbank and click bank alone. I now do not have to rely fully on clickbank I have thought of the whole site flipping rout as well but this is even at jeopardy now. So what the heck are us illinois affiliates supose to do when no matter what we do for marketing online we will be getting screwed more or less.
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              • Profile picture of the author steveblum
                Originally Posted by petevamp View Post

                Here is a little more on what is actually going on behind closed doors and why they want to keep it so secrete. Nexus - Tax Nexus

                As you will see it does not matter if it is a tanagle item or not if this bill passes all illinois affiliates will be completely out business.
                While I would hate to see this legislation pass and if I was in your shoes I would be mad beyond belief, I don't agree with this statement you made.

                First, I've read the amendment and it consistently eludes to tangible products ONLY. I didn't see anything that went beyond that.

                And let's say that Amazon, Overstock, etc. drop out, is it really the end for Illinois affiliates?

                Last I checked there are a ton of other companies, Clickbank, Walmart, etc., that have affiliate programs and where the sales tax problem isn't an issue.

                So trying to look at this from a positive perspective there are still many options for Illinois affiliates who want to move forward and carry on.
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                • Profile picture of the author JTV
                  Originally Posted by steveblum View Post

                  While I would hate to see this legislation pass and if I was in your shoes I would be mad beyond belief, I don't agree with this statement you made.

                  First, I've read the amendment and it consistently eludes to tangible products ONLY. I didn't see anything that went beyond that.

                  And let's say that Amazon, Overstock, etc. drop out, is it really the end for Illinois affiliates?

                  Last I checked there are a ton of other companies, Clickbank, Walmart, etc., that have affiliate programs and where the sales tax problem isn't an issue.

                  So trying to look at this from a positive perspective there are still many options for Illinois affiliates who want to move forward and carry on.
                  Valid points, however, this concerns me, not only because of Amazon and Overstock dropping Ill affiliates, but also because many other advertisers who may go through Commission Junction, ShareASale, etc... might follow suit. We are then left with Clickbank(assuming e-books, etc.. aren't included) and adsense.
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        • Profile picture of the author GautamSaha
          Originally Posted by steveblum View Post


          I know a few other states have passed such rulings against Amazon, but there are ways around everything. So keep your head up high and find your options.
          ...Not sure what you mean...
          If the law passes, Amazon will shut down the Associate account for IL residents.
          Then how do you promote Amazon products (including any digital one)??:confused:
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          • Profile picture of the author steveblum
            Originally Posted by GautamSaha View Post

            ...Not sure what you mean...
            If the law passes, Amazon will shut down the Associate account for IL residents.
            Then how do you promote Amazon products (including any digital one)??:confused:

            Requesting a workaround or setting up shop in a bordering state.
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          • Profile picture of the author petevamp
            Originally Posted by GautamSaha View Post

            ...Not sure what you mean...
            If the law passes, Amazon will shut down the Associate account for IL residents.
            Then how do you promote Amazon products (including any digital one)??:confused:
            Either you do as steve said and use an alternative address from a state like winconsin indiana or iowa or you simply can not sell amazon products anymore plan and simple.

            You best bet is if you have a friend that lives in another state such as indiana then you may want to contact them and ask them if you can use their mailing address just for your amazon account. Or your other option is to go out and get that 9-5 working for someone else which you may or may not be offered advancment for years to come.

            Hello all affiliate marketers who will soon be punished for making a living online or should I say be layed off from your own business. Anyhow I had planned on going to bed hours ago since I have been up for some 37 hours now. But after reading that email then doing some more research I now can not sleep at all.
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    • Profile picture of the author donhx
      Originally Posted by tpw View Post


      Isn't it true that residents of certain states must pay taxes on all physical goods they purchase online?
      Yes. It is usually called a "Use Tax" and is a line on most state tax forms. They expect you to self-report the value of things you bought in other states. I'm pretty sure most people skip that line.
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    • Profile picture of the author CDarklock
      Originally Posted by tpw View Post

      Isn't it true that residents of certain states must pay taxes on all physical goods they purchase online?
      This is the point where I have to say I'm not a lawyer.

      Every state I have ever checked, without exception, has required that its residents pay sales and use tax on certain products no matter where they are purchased.

      It is the consumer's job to know whether sales and use tax was paid, how much was paid, and to which state.

      On the consumer's tax forms each year, all sales and use tax owed is calculated. If some of it was paid in another state, you may deduct what was paid in the other state.

      So if you live in Washington State, where the tax is about 9%, and you go to Virginia where it is 4.5% (or rather it was when I lived there), then you may deduct the 4.5% you paid and only pay the remaining 4.5% you owe.

      If this is reversed, however, you may only deduct the 4.5% tax you owe on the goods in Virginia - not the 9% that was paid.

      In either case, your state government turns to the other state government and sticks its hand out for the tax you paid there, but owe in your home state.

      Now, we turn to the internet. Let's say you buy something on the internet. If, according to your state laws, you are supposed to pay sales and use tax on what you buy... you are the one responsible to know it. If the site where you bought your product did not charge sales tax, then you must declare that on your taxes and pay the sales tax you owe in your state.

      This is the way things are supposed to work, anyway.

      In reality, you go to another state and buy some stuff... but "cop didn't see it, I didn't do it." That stuff just appeared! You didn't buy it! Honestly, it was... a gift! It was the law of attraction! The power of positive thinking! The fruits of your nightly prayer circle! Whatever! You'll say anything, really, just so long as you don't have to pay sales tax on it.

      Now, what the states are after here is to say that if a company has an affiliate in their state, it has a business presence in their state. And that means that have to collect sales tax and remit it to the state on a quarterly basis.

      Because most people take the "standard" sales tax deduction every year.

      Now, if you pay more sales tax than the standard deduction, the state makes money. But if you pay less... whether by purchasing undeclared products in another state, or buying things over the internet... the state loses money.

      The states are losing money, and they are convinced it is because of the internet. So they are trying to make companies on the internet collect - and send them - their sales tax.

      They have every right to do this. They are trying to collect money which is legally and rightfully theirs.

      However, Amazon is saying - also quite legitimately - that it is not their damn job to fix these states' problems. If the states cannot figure out how to get the taxes they are owed, they can take it up with their own residents. Amazon will NOT accept that it is somehow their responsibility to pick up the slack.

      Both sides have a perfectly sensible and reasonable point.

      Now, to the point of "shell" corporations.

      There is a certain level of formality required in the operation of a corporate business.

      If you form a corporation, you will hold at least annual and preferably quarterly meetings of the board of directors. You will keep minutes. You will keep records. You will issue an annual report. Your corporation will have its own bank account, containing its own money, that you do not use for personal reasons. These things are not terribly difficult, but if you do not do them it can destroy the protection of your corporate status.

      This is called "piercing the corporate veil."

      Sometimes it is flat-out ridiculous. I have written personal checks to my own company, stamped them with "for deposit only," taken them to the bank, and deposited them at the business counter. Then I've had them issue a cashier's check for my "commission" on the check I just deposited, paying a small fee for this service, and taken it to a personal teller where I deposited it in my account.

      How stupid! Why not subtract my share from the personal check beforehand?

      Because my company is not me.

      And if you don't integrate this into your brain and make it part of your mindset, then Don is 100% right. They will catch your pathetic subterfuge and you will suffer for it.

      Running a corporation is serious business. I don't really belabour the details, because I know most of you don't care and a few of you will argue about how stupid it is.

      But this is the kind of thing you have to do. You have to grasp that you personally are not your corporation, and your corporation is not you, and every last transaction has to look and feel like you're two different people who do not trust one another.

      EDIT: I didn't notice how long this message was. Sorry. I've been drinking.
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      • Profile picture of the author Buildingfutures
        Originally Posted by CDarklock View Post


        EDIT: I didn't notice how long this message was. Sorry. I've been drinking.
        Even drunk, you make more sense and have better points of reasoning than a good majority of members here do when they're sober and full of energy.

        Also your grammar is amazing for a drunk.

        I'm impressed.
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        • Profile picture of the author tritrain
          This has been a major concern of mine for a while, especially after seeing New York and Colorado put the hammer down on internet-based income earners.

          If you haven't already visited this site - Affiliate Advocacy - please do so. We need to get our politicians on our side.

          Here's a map of the states at risk
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          • Profile picture of the author CDarklock
            Originally Posted by tritrain View Post

            Here's a map of the states at risk
            Notice how NOBODY on this map is NOT at risk?

            Even "no state sales tax" isn't the same as "no risk."

            Always watch for bias in political statements.
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  • Profile picture of the author jwellsy
    I wonder if Amazon will drop the Illinois ebook publishers.
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  • Profile picture of the author FranciscoDancon
    I'm not advising anyone to do anything, but I know a guy who has a bunch of rental real estate in a Central American country. He collects the rent in an account held by a Panama International Corporation, and then he has a debit card issued in a name that is no his which he uses to withdraw cash in the US. So far he has flown under the radar quite nicely and we're not talking small sums of cash either. He's successfully evaded income tax in the US and another country, and I suspect that if the IRS ever came down on him he'd just give the good ole' US of A the middle finger and not come back. He's a big enough fish in his chosen Central American country that he'd never be extradited.

    All I'm saying is don't fall into the trap of thinking that just because the looters pass a law saying you have to pay them that you must pay them. Your money is morally yours, not theirs, and any stupid taxation scheme adopted by a legislature hungry for more money to redistribute is just a fancy way of describing organized crime.

    I am glad to see Amazon fighting back. Sometimes the most effective political tactic is to simply shrug. :-)
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  • Profile picture of the author ce2gain
    I'd encourage anyone in Illinois (like I am) to write Governor Quinn tonight. Let him know your position on this bill and how it will impact you - as politely and specifically as you can. I learned from getting involved in a local political issue a couple of years ago, that you can have an impact if enough people speak up.

    It's easy to just throw up your hands because of lack of faith in our political system. Please don't do that. At least take 2 minutes to send an email. It can't hurt.
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  • Profile picture of the author tritrain
    Minnesota is looking like it could pass the type of law. It was defeated last year, but is up for vote again. Both Republicans and Democrats seem to have some ignorant representative pushing for it.

    The reality is that almost all states are looking for revenue. Most of us already pay income tax, so now they want to double-dip.
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  • Profile picture of the author GarrieWilson
    In IL some digital items are already taxable IF the item could be purchased at a B&M. e.g. A MP3 wouldnt be but a digital copy of MS Windows would be.

    The law, from what I *heard*, requires that affiliates are being payed X total. Which is stupid because it either does or does't create the nexus (what they call it). And the China example is wrong. You will only collect IL tax for those in IL. Thats why Amazon doesnt want it. The look at orders vs affiliates and orders won.
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  • Profile picture of the author Palusko
    I kind of have to wonder what is the thinking process of those creating these legislation. You make money from Amazon program, you pay income tax to federal, state and local governments. They come up with a legislation like this. Amazon drops their program, so they still do not get to collect the sales tax. Also, you lose income. No money for you. No income tax for anyone. I wonder - who wins?
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    • Profile picture of the author CDarklock
      Originally Posted by Palusko View Post

      I wonder - who wins?
      The five states with no sales tax and the one where Amazon has a presence anyway.

      Hey, that last one's me!
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      • Profile picture of the author Palusko
        So you think that Delaware is conspiring and paying other state's legislators?

        Anyway, is there any way to find out how those states that passed this type of legislation doing? Did they increase their tax revenue? Or did they have to come up with another taxes to plug the holes in their budgets after all anyway?

        Originally Posted by CDarklock View Post

        The five states with no sales tax and the one where Amazon has a presence anyway.

        Hey, that last one's me!
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        • Profile picture of the author CDarklock
          Originally Posted by Palusko View Post

          So you think that Delaware is conspiring and paying other state's legislators?
          No, I think people are stupid and greedy enough without a conspiracy.

          Anyway, is there any way to find out how those states that passed this type of legislation doing?
          As far as I know, state budgets are public record. How to get the ones you want and find the information you need, I don't knwo.
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    • Profile picture of the author GarrieWilson
      Originally Posted by Palusko View Post

      I kind of have to wonder what is the thinking process of those creating these legislation. You make money from Amazon program, you pay income tax to federal, state and local governments. They come up with a legislation like this. Amazon drops their program, so they still do not get to collect the sales tax. Also, you lose income. No money for you. No income tax for anyone. I wonder - who wins?
      Income tax isn't paid to local government.

      They are doing it because more and more people are buying online and "99%" (made up) dont pay use tax as directed by the law. So they are trying to create a false Nexus.

      Garrie
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      • Profile picture of the author Palusko
        OK, but you still pay a percentage from your income to local government/town

        Originally Posted by GarrieWilson View Post

        Income tax isn't paid to local government.

        They are doing it because more and more people are buying online and "99%" (made up) dont pay use tax as directed by the law. So they are trying to create a false Nexus.

        Garrie
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        • Profile picture of the author GarrieWilson
          Originally Posted by Palusko View Post

          OK, but you still pay a percentage from your income to local government/town
          [s]No you don't. You have fees but they arent based on income.[/s] It will actually help the local gov. as more people will buy local if they have to pay sales tax online.

          Nevermind I know the ones you are talking about. I dont pay them as I live in the county.
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          • Profile picture of the author Palusko
            Actually, I pay 1% of my income as local tax. It is also on W2 form.
            But we're getting a bit off topic here

            Originally Posted by GarrieWilson View Post

            No you don't. You have fees but they arent based on income. It will actually help the local gov. as more people will buy local if they have to pay sales tax online.
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            • Profile picture of the author GarrieWilson
              Originally Posted by Palusko View Post

              Actually, I pay 1% of my income as local tax. It is also on W2 form.
              Yeah I edited my post. Some cities do have a small tax. And they have school taxes, etc.

              It's late. Forgive me.

              When did strike stop working?
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              • Profile picture of the author Sloop John B
                got my email tonight. woe is me.

                not only am i not a lawyer, but i'm also not very bright...

                but isn't there a better way to collect? some states i think make it illegal to ship cigarettes to its residents. can't they take a similar, hard line? for a given state, say, if an online retailer doesn't collect the state sales tax, or at least communicate the amount or percentage to the consumer, then they are not permitted to ship the package to that same state. if states work together they can enforce or improve collection for deliveries to other states.

                i suppose that's too complicated... i'm just very discouraged...

                people are largely willing to pay the tax. but make it easy for them. at least make their responsibility clear.
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                • Profile picture of the author CDarklock
                  Originally Posted by Sloop John B View Post

                  but isn't there a better way to collect?
                  12% VAT remitted to Federal government by postal code. Fed keeps 5%, state gets 4%, county gets 3%. All other income and sales taxes abolished. No credit card payment allowed to be processed without valid VAT ID and postal code. VAT retained by issuer.

                  So let's say you buy something on the internet with your credit card. You tell the vendor your card information and postal code. The vendor tells his payment processor the card information, postal code, and VAT ID. The payment processor asks the bank for the amount. The bank verifies the amount and the 12% VAT, sends the main payment to the vendor, and retains the 12% VAT itself for later remittance to the government.

                  Because the card issuer is a major financial institution, the effective interest-free loan it receives will more than compensate for the added paperwork, which will then serve as an invaluable reference when auditing business tax records. Businesses and individuals need only file their taxes honestly, without added burdens.
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                  • Profile picture of the author Dan C. Rinnert
                    Originally Posted by CDarklock View Post

                    12% VAT remitted to Federal government by postal code.
                    I think a 10-12% Federal sales tax would be better than a VAT.

                    A VAT, when applied at each point of sale, leads to corruption and loss of transparency. Because taxes are added at every step of the process, the consumer/taxpayer does not fully see the tax being added, because much of it has been added prior to the point of sale, whereby it has the appearance that those evil corporations are raising prices by an exorbitant amount while the nice politicians only raised them a tiny bit... for the children or whatever.

                    And, also for Illinois residents, they want to raise the income tax too:

                    Illinois' personal income tax rate, now 3 percent, would climb to 5.25 percent for four years under the plan Cullerton outlined. After that, it would drop to 3.75 percent.

                    That means someone who now owes $1,000 in state income taxes would owe $1,750 at the new rate, then $1,250 after four years.
                    Source: Proposed Tax Increase Bigger Than Expected « CBS Chicago - Breaking News, Sports, Weather, Traffic, and the Best of Chicago

                    If you are able, I'd move to a lower tax state. That's been the trend over the last decade anyway. The states gaining population (as a result of the latest Census) are typically low tax states while the ones losing population tend to be high tax states.
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                • Profile picture of the author Floyd Fisher
                  Originally Posted by Sloop John B View Post


                  but isn't there a better way to collect?
                  How about kill the sales tax, and merely raise other taxes that actually can be collected to compensate?

                  Now the state gets the same or improved tax income, and they can kill some bureaucracy to boot.

                  Win for everyone.
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                  • Profile picture of the author mott
                    Originally Posted by Floyd Fisher View Post

                    How about kill the sales tax, and merely raise other taxes that actually can be collected to compensate?

                    Now the state gets the same or improved tax income, and they can kill some bureaucracy to boot.

                    Win for everyone.
                    Sorry Floyd that will never happen, makes too much sense.
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  • Profile picture of the author Sloop John B
    There you go! Keep drinking I'm really curious what state legislatures have considered, and how IL studied NC et al.
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  • Profile picture of the author jwardz
    I did not see this thread. I started another one. Oops.

    Along with Affiliate sites, I have a bird toy site and an affiliate digital product site. I also have a text book business on Amazon.

    This law not only ends my Amazon Affiliate business, but puts me out of business on my bird toy site, and my text book store. Who, from out of state, is going to pay and extra 6.25% when they can buy the same product from someone else who will not charge sales tax. I need to move.
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  • Profile picture of the author jwardz
    By the way the bill passed and is waiting for the Governors signature.
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  • Profile picture of the author jwardz
    Here is a Chicago Tribune article I found online. FatWallet is not far from where I live. They are looking to leave Illinois.
    Web businesses say they'll flee Illinois if sales tax is OK'd - Chicago Tribune
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    • Profile picture of the author mott
      I also posted already in another thread. I got the email too, and this does not bode well for me unless I move or set up an LLC (if that will in fact work).

      I bet someone will start a WSO soon on how to set up one, or how to get around this problem.
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      • Profile picture of the author kindsvater
        Originally Posted by mott View Post

        I also posted already in another thread. I got the email too, and this does not bode well for me unless I move or set up an LLC (if that will in fact work).

        I bet someone will start a WSO soon on how to set up one, or how to get around this problem.
        I like to stay a couple years ahead of the curve:

        How to quickly and legally get new affiliate accounts


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        • Profile picture of the author Dave Rodman
          Banned
          1) If only GROUPON was a big affiliate of Amazon/Overstock. Chicago politicians are in love with the company and it'd be great if they said they were leaving to go someplace else.

          2) Anyone who thinks that national sales tax or VAT's would be a good idea ON TOP OF FEDERAL INCOME TAXES is insane. They should REPLACE income taxes. Politicians would just spend the extra money.
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          • Profile picture of the author Dan C. Rinnert
            Originally Posted by Dave Rodman View Post

            2) Anyone who thinks that national sales tax or VAT's would be a good idea ON TOP OF FEDERAL INCOME TAXES is insane.
            Who suggested that?
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            • Profile picture of the author Dave Rodman
              Banned
              Originally Posted by Dan C. Rinnert View Post

              Who suggested that?
              When most people propose VATs or national sales taxes, they are suggesting them as a way to reduce the deficit and something in addition to federal income taxes. Not saying anyone here said that, but in the political world, it's always IN ADDITION. If it's to replace income taxes, it's not even a discussion.
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              • Profile picture of the author Dan C. Rinnert
                Originally Posted by Dave Rodman View Post

                When most people propose VATs or national sales taxes, they are suggesting them as a way to reduce the deficit and something in addition to federal income taxes. Not saying anyone here said that, but in the political world, it's always IN ADDITION. If it's to replace income taxes, it's not even a discussion.
                Okay. Because there are some crazy people around here, but I haven't seen any THAT crazy so far today.

                But, yeah, politicians always want more money. Usually to bribe us with it so they can get re-elected.

                "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money." - Alexis de Tocqueville
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  • Profile picture of the author dv8domainsDotCom
    Gosh I'm really sorry to say this but when are we as Americans (and not to exclude my beloved non-US warriors) going to stand up to this tax Tyranny? Are we this scared? What happened to no Taxation without representation? What right does a state have to collect Sales tax based on ADVERTISING done in that state? This would be the equivalent of having to tax based on the fact that a TV ad runs in Illinois, so therefore the company that runs that ad must pay sales tax on ALL sales in that state? This is not making sense any more.

    Go ahead and argue with me, and tell me it's not "that simple". I don't care. In my mind, it didn't need to be "that simple" for us to declare war on a Tyrannical government during the American Revolution that was also taxing us to death. We refuse to believe that our own government is beyond reproach and any better than King George III was, at this point (or possibly heading in that direction)? Please.

    "Power corrupts; absolute power corrupts absolutely" -Lord Acton

    Be well. Hope this doesn't end for our friends in Illinois.
    -Kev
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    • Profile picture of the author CDarklock
      Originally Posted by dv8domainsDotCom View Post

      What happened to no Taxation without representation?
      You're represented. You get to vote. If you don't, or you vote for people who do things like this, then you don't get to bitch about it.

      Similarly, if you don't like the laws in your state, there are forty-nine others.

      When I was planning to do a lot of affiliate promotion, I looked at what was going on in North Carolina and moved to Oregon. There's no state sales tax in Oregon, so I could promote any affiliate program I wanted.

      When I later decided to concentrate on creating my own info products instead, I moved back to Washington state where there's no state income tax.

      I appreciate that some people have family and friends they don't want to leave behind. But when you have a dilemma like this, you get to make a choice.

      If you choose to remain in Illinois, then clearly remaining in Illinois is the choice you prefer. Whinging that you don't get to have everything you want is just childish. Nobody gets everything they want.
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  • Profile picture of the author J23
    I live in Illinois and just got the email as well. Luckily, Amazon is only a small part of my income, but either way, it's still a passive income that I do nothing for and it pisses me off that they want to pass something like this.

    What I'm wondering is how does this law affect other affiliate programs such as those through CJ for example? Let's say everything I sell on my Amazon sites is also sold at Wal-Mart so I join their affiliate program through CJ (I don't know if Wal Mart operates through CJ or not, just using this as an example) and just start selling as an affiliate for them. Would this work, or are ALL of the big online merchants going to start dropping affiliates in the states that get slapped?

    I guess there's also always the option of just turning Amazon sites into Adsense sites and seeing how that performs. Usually product-based sites do fairly decent with Adsense because there's a good amount of advertisers on the content network trying to sell these items. I haven't tested Adsense on any of my Amazon sites yet so I can't say for sure how well this would work, but it's just an idea.

    You could also flip your Amazon sites to a buyer in one of the states that isn't affected by this B.S. law. Sure you lose the passive income every month, but if you can get a years worth of revenue or even more, that's a good chunk of money you can use to build up other income streams.

    These ideas are assuming you don't want to incorporate yourself in one of the other states that have been mentioned in this thread.

    Anyway, I hope it doesn't pass, but it looks like it probably will. I guess we'll see what happens soon.
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  • Profile picture of the author GRF
    I'm trying to come up with a work-around other that getting an LLC (which looks like around $400) and still live in Illinois.

    I have a sister-in-law that lives in Montana. If I change my contact address to that, would that allow me to keep my affiliate status on Amazon?

    I don't get checks from Amazon, my affiliate earnings are direct deposited into a bank account in Illinois. Will Amazon RED FLAG that? Or do I need to set up a bank account in Montana and maybe have a debit card so I can withdraw earnings?

    Also, what about the tax ID? Will my Illinois SSN be a RED FLAG to Amazon?
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    • Profile picture of the author mott
      Originally Posted by GRF View Post

      I'm trying to come up with a work-around other that getting an LLC (which looks like around $400) and still live in Illinois.

      I have a sister-in-law that lives in Montana. If I change my contact address to that, would that allow me to keep my affiliate status on Amazon?

      I don't get checks from Amazon, my affiliate earnings are direct deposited into a bank account in Illinois. Will Amazon RED FLAG that? Or do I need to set up a bank account in Montana and maybe have a debit card so I can withdraw earnings?

      Also, what about the tax ID? Will my Illinois SSN be a RED FLAG to Amazon?
      I am not an accountant, but I'll give my opinion...I don't think Amazon will care about anything except the state your address shows.

      Then again, the state of Illinois might care if you show earnings from Amazon and yet not report any sales taxes. Unless of course you report the taxes anyway.
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      • Profile picture of the author GRF
        Or if the direct depost into an Illinois bank account might be a red flag, what about changing the contact address to Montana and buy an Amazon.com gift certificate/card and have the affiliate income deposited to that. I don't make that much income at least now to warrant setting up an LLC for $400 plus dollars. Any thoughts on this solution? I think with the gift card I can withdraw money with that too but not sure.
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  • Profile picture of the author Dean Dune
    If you're making serious income from online activity, you should have an LLC already.

    Legalzoom is a great way to go about this.

    I set mine up in Nevada.
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    • Profile picture of the author JTV
      Originally Posted by Dean Dune View Post

      If you're making serious income from online activity, you should have an LLC already.

      Legalzoom is a great way to go about this.

      I set mine up in Nevada.
      But is this possible? Setting up a LLC in1 state while living in another? What about then registering that LLC as a foreign corporation in the state you are living in? many questions
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    • Profile picture of the author Tom B
      Banned
      Originally Posted by Dean Dune View Post

      If you're making serious income from online activity, you should have an LLC already.

      Legalzoom is a great way to go about this.

      I set mine up in Nevada.

      Do you have a resident agent for your company?
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      • Profile picture of the author webpromotions
        Originally Posted by Thomas Belknap View Post

        Do you have a resident agent for your company?
        Cmon Thomas...what are you doing posting 'real' replies with worthwhile information? You're supposed to just post stuff in regards to things that you heard somewhere on that 'intarweb' thing.

        How many 'thanks' and sig views do you expect if you keep this up? sheesh.
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        • Profile picture of the author jwellsy
          There is more to it that affects more than just Amazon affiliates.

          State to offer sales tax amnesty for online shoppers
          December 13, 2010 8:49 AM | No Comments

          SPRINGFIELD -- The state of Illinois wants residents to pay sales taxes on all of the gifts they buy. Online shoppers, this means you.

          Illinoisans can often dodge sales taxes by shopping online, but the state is hoping to collect on those taxes next year by offering a sales tax amnesty.

          A new law allows people who didn't pay sales tax on items bought online, through the mail or over the phone between June 20, 2004, and the end of 2010 to pay what they owe without penalty. The tax amnesty runs from Jan. 1 through Oct. 15.

          Department of Revenue spokeswoman Sue Hofer tells the (Springfield) State Journal-Register that Illinois also plans to offer a more detailed worksheet on state income tax return forms to get taxpayers to pay up.

          -- Associated Press
          State to offer sales tax amnesty for online shoppers - Chicago Breaking News
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  • Profile picture of the author GRF
    On second thought, I don't think Amazon is going to care about direct deposit. You just enter the routing # and account # and bank name.

    I don't think there going to trying and figure out where you really reside, unless they run a report on their database and find out the masses of affilates in Illinois have changed their contact address in the last few days!
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    • Profile picture of the author GarrieWilson
      Originally Posted by GRF View Post

      On second thought, I don't think Amazon is going to care about direct deposit. You just enter the routing # and account # and bank name.

      I don't think there going to trying and figure out where you really reside, unless they run a report on their database and find out the masses of affilates in Illinois have changed their contact address in the last few days!
      Routing numbers can show the state/city. 1099s will be an issue too.

      You could sell the Amazon affiliate side to your sister and have her pay you an 80% cut of the profits as a subcontracter. Your sister then keeps 20%, sends you a 1099 and checks. Plus she can now deduct part of her house hold bills from taxes and gets 20% for doing very little. Win for you and her.

      Not legal advice... Might be illegal... blah blah blah.

      Garrie
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      • Profile picture of the author MrToken
        Ok just a crazy idea, I have no clue how this would work.

        If someone set up a company out of IL that filtered Amazon commissions.
        As an affiliate you get from 4-8% what if we went through someone else and we paid them .25%.
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  • Profile picture of the author Evita
    Look.

    It is time to hold your ELECTED officials accountable.

    Vote for, and support, those who are for free enterprise.

    Get active!! Get on as many local radio shows as you can, inundate the Gov's office with phone calls.

    Be Heard!!

    This country is going down the tubes with the politics "of today"... (Tongue in cheek!!!)

    Evita
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    • Profile picture of the author Julie McElroy
      Well, I did write my congressman - a while back since I reside in CO. I also reached out to Glenn Beck - he is a big proponent of entrepreneurs.... LOL He probably won't get to my email though.... We have to spread this
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      • Profile picture of the author petevamp
        Hb 3659 goes beyond affiliates. Besides costing thousands of illinois tax payers there only means of income. The state would also be losing income from major business such as ups, usps, fedex and the many others. Yes People will still contiue to buy products online. However the pleasure of finding discounted products from not having to pay an extra tax on them now goes out the window. Since typically the products even them selves out in the long run once you pay for the shipping. Also the amount of gas the individual saved from not hopping in their car to go find the product. I also noticed they are trying to raise gas tax as well with a different bill.

        The oil companies stated with that gas tax that they will simply pull out of illinois which would then foce gas prices sky high for the ones who actually do stay here. Another case of hurt the little guy while making the large corporations set up shop in other locations. This too would cost thousands of jobs through out illinois if companies like bp where forced out of the state because of another tax increase. Which really does not hurt the company it only hurts you.

        Another thing that caught my eye in hb 3659 is the fact they think this bill will open up more jobs for illinois. How is it going to open up more jobs when it is send thousands to the unemployment line when they will not beable to collect unemployment since they did not actually work for a illinois based company. There for it doesnt send them to the unemployment line it sends them straight to the shelter line.

        Thousands of jobs will be lost in the long run. Thousands will be completely out of work and out of options. Thousands will lose their homes due to HB 3659. While only pennies will actually be made for the state in taxes.

        Me personaly I say quinn and them other state reps need to take a down grade on their pay checks. There is no reason why they need to make more then 80k a year for what they do. Reps should only be allowed to stay in office for so long. They should not be able to get in and stay in year after year after year untill they are on their death bed. Then they finally get forced out. It is complete bs get those sorry sobs out of the office.

        Less Government not likely Make way BIGGER GOVERNMENT
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    • Profile picture of the author CDarklock
      Originally Posted by Evita View Post

      It is time to hold your ELECTED officials accountable.
      I approve this message.
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    • Profile picture of the author Dave Rodman
      Banned
      Originally Posted by Evita View Post

      Look.

      It is time to hold your ELECTED officials accountable.

      Vote for, and support, those who are for free enterprise.

      Get active!! Get on as many local radio shows as you can, inundate the Gov's office with phone calls.

      Be Heard!!

      This country is going down the tubes with the politics "of today"... (Tongue in cheek!!!)

      Evita
      I hate this advice cause it's such rah-rah BS. The way politicians of any significance get elected is with money...plain and simple.
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  • Profile picture of the author GRF
    So if I just change my contact information below to the address in Montana where my sister-in-law lives, Amazon will no longer think I reside in Illinois and thus be able to retain my affiliate status? Does anyone know if Phone Number is mandatory?

    Payee Name:
    Address Line 1:
    City:
    State, Province or Region:
    ZIP or Postal Code:
    Phone Number:
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    • Profile picture of the author Charles Harper
      Originally Posted by GRF View Post

      So if I just change my contact information below to the address in Montana where my sister-in-law lives, Amazon will no longer think I reside in Illinois and thus be able to retain my affiliate status? Does anyone know if Phone Number is mandatory?

      Payee Name:
      Address Line 1:
      City:
      State, Province or Region:
      ZIP or Postal Code:
      Phone Number:
      Get a skype number.
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  • Profile picture of the author JD Nunes
    I've heard of this many times before, but the entire concept makes NO sense. An affiliate simply refers customers to a business. Where the affiliate lives should have no bearing on anything. An affiliate who lives in location A can send a customer to the same place as an affiliate who lives in location B. The transaction would occur in the same place regardless. Shouldn't Internet sales tax only apply to a person who lives in the same state as the vendor? This is a customer-to-vendor/merchant issue - affiliates are just middlemen.

    Another Warrior summed it up: "North Carolina followed by Colorado determined that if Amazon has an affiliate in their state, then that constitutes a physical location in that state. Therefore, if Amazon has an affiliate in one of those states, they must collect sales taxes on local residents who purchase Amazon products through that affiliate."

    I think that is morally wrong. Saying that just because someone who lives in a certain state is advertising your business, that somehow means that your business has a physical presence in that state, and thus, they get to steal more of your hard-earned money. Alright then, according to that insane logic, any given business or idea that is advertised in any given location has a "physical presence" in that location, thus, the tax laws of that location must be adhered to for Internet transactions. Have an affiliate in Hong Kong (or any other random place)? Better look up their tax laws and collect sales tax from anyone who purchases from there...and be prepared to somehow know in advance where they live, if you're selling a digital product.

    Utter nonsense...

    Edit: I thought this was a relevant link: http://atr.org/atr-urges-gov-quinn-veto-affiliate-a5747

    Second edit: The thought of this annoys me even more: buyer from location A is referred to a business in location B by an affiliate from location C. Apparently, the business would need to essentially tell the buyer "hey, this guy from location C referred you, sooo we're gonna have to charge you extra sales tax to pay the state that HE is in." ... or would this only apply if the buyer and affiliate were in the same state? :/ Geeze...we're all citizens of the Universe, no need to complicate things.
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    • Profile picture of the author JTV
      Originally Posted by JD Nunes View Post

      Second edit: The thought of this annoys me even more: buyer from location A is referred to a business in location B by an affiliate from location C. Apparently, the business would need to essentially tell the buyer "hey, this guy from location C referred you, sooo we're gonna have to charge you extra sales tax to pay the state that HE is in." ... or would this only apply if the buyer and affiliate were in the same state? :/ Geeze...we're all citizens of the Universe, no need to complicate things.
      This is the way I understand it as well, which is why this bill is unconstitutional. They would be collecting Illinois sales tax from buyers NOT from Illinois just because the Amazon affiliate is from Illinois. Just another desperate measure by corrupt and incompetent politicians. I don't see how this bill could even pass, but it did...Time to start focusing on Clickbank products and online retailers that actually have a brick and mortar presence in the state and offer affiliate programs. Walmart and Target just to name a couple big ones.
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      • Profile picture of the author jendoe
        Originally Posted by JTV View Post

        This is the way I understand it as well, which is why this bill is unconstitutional. They would be collecting Illinois sales tax from buyers NOT from Illinois just because the Amazon affiliate is from Illinois. Just another desperate measure by corrupt and incompetent politicians. I don't see how this bill could even pass, but it did...Time to start focusing on Clickbank products and online retailers that actually have a brick and mortar presence in the state and offer affiliate programs. Walmart and Target just to name a couple big ones.
        I don't think this is correct.

        My reading was that companies (Amazon, Overstock, etc.) must collect state sales tax from all in-state buyers (regardless of whether they were referred by an affiliate) if they have a presence in the state.

        Currently Amazon does not have a presence in IL. The new law would redefine "presence" so that paying more than a certain amount ($10k or so?) to affiliates in that state would now be considered a presence.

        So... if Amazon only had one affiliate in IL, and paid them $500/year, no presence, and no sales tax.

        If Amazon had 500 affiliates in IL, and paid them $1/year each, no presence, no sales tax.

        If Amazon has enough affiliates that their total payments to affiliates is $10k or greater (I think, I may be misremembering the number) - then they collect sales tax on ALL sales to IL. Not JUST the sales that come via IL affiliates.

        It's basically saying "if you have affiliates, it's the same as if you had an office or distribution center in our state, and you are now required to collect sales tax." Just the same as if Amazon was headquartered in IL.

        I think part of the problem is, this is just a really dumb way to define "nexus". Affiliates aren't employees, and Amazon certainly doesn't have a "brick and mortar" presence just because they have an affiliate somewhere (i.e. Amazon has no financial interest in my house! It's mine, not Amazon's, and is not a place of business for Amazon!)

        What if Amazon, or Overstock, wanted to hire an ad agency in IL? They are paying the agency for a service, and the agency is located in IL, would that now form a nexus, and require them to collect taxes? If so, it becomes even more obvious how this hurts the state, Amazon would simply say, "OK, we won't hire any IL company to provide any service to us."

        I do hope they're able to put a stop to this sooner, rather than later. I'm in GA, so it's not yet an issue here, but... I'm still new to IM. Amazon is the first thing I've really been seeing consistent results with, but at $50/month commissions, I wouldn't be able to afford to ditch my full-time job and move, unless I moved into my mom's basement or something Which I don't see happening...
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        • Profile picture of the author mrdomains
          Ouch, I sympathize with those affected by the new tax laws.

          Still, reading the thread I get the impression there are states that do not tax services? Man, coming from Scandinavia that is like Nirvana.

          EVERYTHING is taxed here. 25% sales tax on all sales, on all levels, indefinite times, round and round it goes... Here is the best part, the sales tax is the last applied. So for instance we have a environmental tax on gas.. well the sales tax is applied on the total, tax on tax.. etc ad infinitum. I guess we will soon be taxed for the air we breathe.

          We lost the battle, decades ago. It is now such an integral part of the GNP that it is impossible to amputate it. It has become a virus that sustains the host.

          If you can, fight the sales tax with everything you got.
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        • Profile picture of the author JTV
          Originally Posted by jendoe View Post

          I don't think this is correct.

          My reading was that companies (Amazon, Overstock, etc.) must collect state sales tax from all in-state buyers (regardless of whether they were referred by an affiliate) if they have a presence in the state.

          Currently Amazon does not have a presence in IL. The new law would redefine "presence" so that paying more than a certain amount ($10k or so?) to affiliates in that state would now be considered a presence.
          I'm not completely sure but this is why Amazon is threatening dumping Ill affiliates because they would avoid having to collect the sales tax. The Illinois affiliates is what is including Amazon into the redefined "nexus". No affiliates = no Illinois presence therefore no sales tax collection.

          Now it could be that they must collect sales tax from in-state buyers regardless, but out of state buyers wouldn't be subject to this tax. If the out of state buyer went through an Illinois affiliate, I believe the new bill would require Amazon to collect sales tax from them.
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          • Profile picture of the author paulie888
            Originally Posted by JTV View Post

            I'm not completely sure but this is why Amazon is threatening dumping Ill affiliates because they would avoid having to collect the sales tax. The Illinois affiliates is what is including Amazon into the redefined "nexus". No affiliates = no Illinois presence therefore no sales tax collection.

            Now it could be that they must collect sales tax from in-state buyers regardless, but out of state buyers wouldn't be subject to this tax. If the out of state buyer went through an Illinois affiliate, I believe the new bill would require Amazon to collect sales tax from them.
            This is what has everyone all up in an uproar. Illinois affiliates would effectively be blacklisted and basically lose all or most of their affiliate income, because who in their right mind would want to shop Amazon and pay an out of state sales tax??

            Of course this is all contingent on whether the bill gets passed, and this remains to be seen.
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  • Profile picture of the author Tbone350
    If the governor sign this bills, could I promote affiliate physical program from companies such as Commission Junction, Linkshare and others in Illinois. Sorry for the stupid question. I am new to affiliate marketing and just finished studying the amazon affiliate business through Jan Ross, and Dead Super affiliate courses. It seems I just wasted my money in those courses. 
    Two more questions!
    1) I got double citizenship. Could I run the Amazon Affiliate Business from my parent’s country in South America (bank account and address register there) without getting in trouble with the IRS in USA. “I just want to play by the rules”.
    2) What about an LLC business in Indiana. Do I also have to open a business bank account in Indiana to receive the affiliate commission from Amazon? I am assuming it is not legal to open an LLC in another state and receive the amazon affiliate commission in a regular bank account in Illinois.
    100% affiliate newbie here. Please have patience with me 
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  • Profile picture of the author Charles Harper
    For those of you really making money with Amazon or any other affiliate program, is it worth it for you to move to Indiana or Wisconsin? I realize you shouldn't have to, but I am just curious. And isn't Amazon just the poster child? I can't imagine the other companies will be far behind in this kind of legislation.

    CT
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  • Profile picture of the author remodeler
    Putting your house up for sale, packing up, buying a new home in another state, taking the kids out of one school and sending them off to another, and everything that goes along with that entire scenario, not to mention leaving family and loved ones behind, and ultimately hoping that the state you move to doesn't adopt the same legislation is just not a viable strategy in my opinion.

    It appears from what I have been reading, that setting up a corp in DE or NV would be the better alternative. You have to set it up correctly and run the finances the right way, etc. I just don't know what the costs will be in getting it all done yet. Definitely want to get legal advice and I'm looking into it.

    In the meantime, I've been doing a lot of reading and it appears the Gov is not making a decision to sign or veto the bill until next week. So I am holding out hope that as more and more of us email/call his office, our voices will have an effect. I'm thinking of also going to Springfield as well.
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    • Profile picture of the author mott
      Originally Posted by remodeler View Post

      Putting your house up for sale, packing up, buying a new home in another state, taking the kids out of one school and sending them off to another, and everything that goes along with that entire scenario, not to mention leaving family and loved ones behind, and ultimately hoping that the state you move to doesn't adopt the same legislation is just not a viable strategy in my opinion.

      It appears from what I have been reading, that setting up a corp in DE or NV would be the better alternative. You have to set it up correctly and run the finances the right way, etc. I just don't know what the costs will be in getting it all done yet. Definitely want to get legal advice and I'm looking into it.

      In the meantime, I've been doing a lot of reading and it appears the Gov is not making a decision to sign or veto the bill until next week. So I am holding out hope that as more and more of us email/call his office, our voices will have an effect. I'm thinking of also going to Springfield as well.
      I hope Gov. Quinn thinks about this a lot. I think the legislature acted too quickly, and felt that Amazon et al would simply charge the sales tax and give the state more revenue. That is the idea.

      But in reality, once this bill goes through, Amazon will remove all Illinois affiliates, and Illinois will LOSE revenue. There are 9000 Amazon affiliates in Illinois (including me) and they will all lose revenue, which means less tax money for Illinois. Worse than that, Illinois will lose tax revenue from online businesses who use Amazon, and who will either lay off employees and/or move away because of the bill.

      I read that Amazon will legally challenge this bill if it goes into law.
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  • Profile picture of the author Floyd Fisher
    How many times has Amazon threatened this, yet failed to follow through when the tax does come into effect?

    I know they threatened this in New York, but backed down in the end. I believe the same is true in Colorado as well, but right now I'm too lazy to google.

    Yeah, sales tax is a PITA (and it needs to be done away with), but this crying wolf is beginning to bother me. Either do it or don't, but don't make threats only to back down in the end.
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    • Profile picture of the author mott
      Originally Posted by Floyd Fisher View Post

      How many times has Amazon threatened this, yet failed to follow through when the tax does come into effect?

      I know they threatened this in New York, but backed down in the end. I believe the same is true in Colorado as well, but right now I'm too lazy to google.

      Yeah, sales tax is a PITA (and it needs to be done away with), but this crying wolf is beginning to bother me. Either do it or don't, but don't make threats only to back down in the end.
      I'm not sure if Amazon has backed down in New York. From what I read, they appealed the decision of an appeals court that the Amazon Law there is not unconstitutional, and is taking the issue to a higher court. So I hope they do follow through with their threats.
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      • Profile picture of the author Floyd Fisher
        Originally Posted by mott View Post

        I'm not sure if Amazon has backed down in New York. From what I read, they appealed the decision of an appeals court that the Amazon Law there is not unconstitutional, and is taking the issue to a higher court. So I hope they do follow through with their threats.
        No, they did back down in New York. I live here, and if I was so inclined, I could become an affiliate right now.

        Amazon is trying to fight this through the courts, but they have lost at every turn, and though they are appealing to the Supreme Court, hopes aren't real high of them winning.

        Either way, Amazon has zero plans to terminate NY affiliates, which is my real issue with this. Don't threaten what you won't follow through on, or you look silly IMHO.
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        • Profile picture of the author mott
          Originally Posted by Floyd Fisher View Post

          No, they did back down in New York. I live here, and if I was so inclined, I could become an affiliate right now.

          Amazon is trying to fight this through the courts, but they have lost at every turn, and though they are appealing to the Supreme Court, hopes aren't real high of them winning.

          Either way, Amazon has zero plans to terminate NY affiliates, which is my real issue with this. Don't threaten what you won't follow through on, or you look silly IMHO.
          Oh I thought you meant they backed down in legal battles. I think they yanked all the affiliates in Colorado, and a few other states too.

          If this bill passes, I would think the affiliates who make up the most money for Amazon, would move to another state or get a LLC (if that would even work). I wonder what would happen if Amazon decided not to remove the affiliates after all, but not charge the sales tax either.
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          • Profile picture of the author Sloop John B
            I wrote the gov and told him my hard luck -- that I have a chronic illness and saw the Internet as my only means to survive, save disability insurance, my rich uncle, compromising photos I have of a certain politician's daughter, a very modest dope business, and an unopportunistic employer who strangely refuses to lay me off.

            I even showed him my website (I was hoping he liked talking bears). And what do you know, he pinged me on yahoo chat within the hour. And it's a good thing... He said I have much bigger concerns and asked if I'd not heard of the original content penalty. I told him I had but it was a spoof. He gave me one of those belly rolling, leg kicking emoticons and said, "A spoof? For crissakes, you can't believe everything you read on the Internet." And I knew that was true. I once met a girl on Craigslist who told me she'd wash my hair and feet for a hot meal. So I let her let her do just that, I did, but did she cook me a meal? Heck no! I didnt fret. It wasn't a total loss. Turns out she's a certain politician's daughter. Plus my hair smelled like fresh watermelon.

            Anyway the gov suggested I move to fireworks friendly Indiana and copy someone else's site, just not someone from Illinois, otherwise it might look original in short time. Alas, he said he'd sign the bill, but at least not before he bought a couple of my best bears.
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        • Profile picture of the author affenpinscher
          Re New York: Amazon may be keeping N.Y. affiliates until they have exhausted court systems. Courts don't typically take cases on a purely intellectual basis (I want to sue to see what the court would say about x even though I have nothing at stake) so Amazon may need to keep a basis for the lawsuit (NY affiliate income) until it's settled.
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          • Profile picture of the author Eyetrap
            Can't you just start an LLC in another state and rent a cheap $100/month (or less) office room in that other state?
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  • Profile picture of the author remodeler
    They have terminated RI, NC and CO since then. HI was also terminated, but reinstated after the gov later vetoed. They've made their position well known and followed through in every other state. The NY case is still ongoing, so I can hardly call that backing down or crying wolf.

    The bottom line is that we can all sit and argue the merits, court updates, etc., or we can get involved. If you don't want to call your reps and gov's to take a stand and hold them accountable, then don't complain when your state is next on the chopping block. This is only going to continue growing like a cancer.

    How many members are there here? Tens of thousands? I would challenge everyone to call or email this gov and let them know your position. It doesn't matter if you are an Amazon affiliate or not.

    Here is a link to the email and phone info for the IL Gov.

    Governor : Contact the Governor

    Springfield, IL 62706
    Phone: 217-782-0244

    Chicago, IL 60601
    Phone: 312-814-2121

    It takes only a minute to let them know you oppose House Bill 3659. If you call, they don't even ask what state you are from or anything.

    If this isn't the time to get involved then when is it? This is the Warrior Forum isn't it? Then let them know it. We're past the time for discussion. It's now time to take action. We can make a difference.
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  • Profile picture of the author SageSound
    Something to consider is a recent decision by a Federal District Court in Calif that ruled that the legal jurisdiction for a web-based entity can possibly be tied to the location where the domain registrar is domiciled.

    That was a ruling for a guy who's been convicted in multiple cases of fraud, and he owns a huge portfolio of domain names. A collection agency attempted to seize them based on jurisdictional grounds that the domain registrar was located in the same county as the collector, so they had the right to seize the property.

    So if you have a web site hosted on a server in Texas using a domain name registered by a registrar in Delaware; 95% of your customers are outside of Illinois; the commissions are paid into your PayPal account in California; and a business entity in Nevada supposedly owns all of these assets, as well as a bank account in Nevada; what does the fact that you happen to reside in Chicago have to do with anything?
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  • Profile picture of the author GautamSaha
    If the bill passed, then if an Illinois resident buys a product from amazon ( directly or
    via an affiliate link from an affiliate who is in another state) then is Amazon suppose
    to collect an IL Sales Tax?
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    • Profile picture of the author mott
      Originally Posted by GautamSaha View Post

      If the bill passed, then if an Illinois resident buys a product from amazon ( directly or
      via an affiliate link from an affiliate who is in another state) then is Amazon suppose
      to collect an IL Sales Tax?
      Only if Amazon decides to keep affilates from Illinois, because they will then have a presense in Illinois. If Amazon decides to disconnect from all Illinois affiliates, then no.

      Currently bill or no bill, Illinois residents have to pay the tax on anything they buy fnrom Amazon. But no one does, and no one will start. The bill forces Amazon to collect this tax, since they have affiliates in Illinois, but Amazon would rather just get rid of the affiliates than collect the tax.
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  • Profile picture of the author webpromotions
    I don't know if I should laugh or sigh at all the people saying you should incorporate in Delaware to solve all of your problems.

    There is a marketing lesson to be learned w/ that one.
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  • Profile picture of the author sarahberra
    I've heard that they were going to make it impossible to sell Amazon products in certain states. That sure does seem unfair. I live in Arizona, but we are moving to Oregon.
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  • Profile picture of the author rkcc4
    If this is going to happen in other states why not create a virtual ID in the UK or Ireland (who have justt 12.5% corporation tax). In the UK you can buy a company off the shelf for $75, get a registered office with an accountant who charges about $200 per annum to do basic paperwork for company.
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  • Profile picture of the author Tbone350
    Hey guys

    Just take a look in this youtube video.

    Amazon tax debate

    I can't post the link because I have less than 15 post. So just go to youtube and type "Amazon tax debate"... then sort by upload date.. You'll see Rep. Dave Winters discusses the Amazon sales tax legislation.
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  • Profile picture of the author ce2gain
    It definitely looks like this is going to be an issue for many states. Within the last couple of days both Connecticut and California have introduced new Nexus Tax bills. It will be interesting to see how Amazon continues to respond if many states start to pass these laws.

    I haven't heard any further news on IL. Has anyone else?
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    • Profile picture of the author Bekah Howard
      Originally Posted by ce2gain View Post

      I haven't heard any further news on IL. Has anyone else?
      No news yet since they reported that it was finally on the governors desk on the 13th...
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    • Profile picture of the author remodeler
      Originally Posted by ce2gain View Post

      It definitely looks like this is going to be an issue for many states. Within the last couple of days both Connecticut and California have introduced new Nexus Tax bills. It will be interesting to see how Amazon continues to respond if many states start to pass these laws.

      I haven't heard any further news on IL. Has anyone else?
      You're right, CT and CA both have multiple nexus tax bills introduced in their legislatures. On top of that, SC and GA now have special tax commissions looking into this and other ways to raise taxes as well. You can find out more at Performance Marketing.

      http://www.performancemarketingassociation.com/
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      • Profile picture of the author VBelladonnaV
        You're right, CT and CA both have multiple nexus tax bills introduced in their
        As far as California what are these people thinking???

        Right now California has 13% unemployment in Los Angeles County and the percentage is higher in other counties. ( and that is what is being counted that doesn't count the people that are out of benefits)

        So now they want to put this law in that now will cause more people to lose any revenue...........Unbelievable!! :confused:
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  • Profile picture of the author timpears
    I assume that these states have a state income tax. So in order to collect some sales tax, on sales made in other states by the way, they will give up the income tax on the revenue that the associates make. Plus the associates are put in a bad place due to losing that income.

    Don't legislators think before they pass these bills? Are they all stupid?
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    • Profile picture of the author Bekah Howard
      Originally Posted by timpears View Post

      I assume that these states have a state income tax. So in order to collect some sales tax, on sales made in other states by the way, they will give up the income tax on the revenue that the associates make. Plus the associates are put in a bad place due to losing that income.

      Don't legislators think before they pass these bills? Are they all stupid?
      Yes, Illinois has income tax. In fact Illinois just raised the income tax by 66%, which is enough to make business pause.

      And yes, this is all a stupid decision. The big "need" for the online sales tax is to supposedly even the playing field for small mom and pop shops. However, if sales tax alone is enough to destroy a store, then the business needs to learn to be both competitive and creative, and shutting down online companies will not change that fact one bit.
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  • Profile picture of the author dagaul101
    That would be a little sad, but ofcourse there is nothing stopping folks in Illinois from giving addresses of friends and relatives elsewhere
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    • Profile picture of the author Michael Franklin
      Originally Posted by dagaul101 View Post

      That would be a little sad, but ofcourse there is nothing stopping folks in Illinois from giving addresses of friends and relatives elsewhere
      Abolutely! In fact I tell people that to circumvent this nonsense:

      1) Go with a friend or relative (that you trust) in an Amazon-approved state

      OR

      2) Setup an address at a UPS store in an Amazon-approved state

      It works!
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      • Profile picture of the author mott
        Originally Posted by Michael Franklin View Post

        Abolutely! In fact I tell people that to circumvent this nonsense:

        1) Go with a friend or relative (that you trust) in an Amazon-approved state

        OR

        2) Setup an address at a UPS store in an Amazon-approved state

        It works!
        Well, I feel if this bill passes, and as a result you lose your Amazon account, and you try one of the above methods, you are asking for trouble. You would still have to report your income on your Illinois state tax form, and you will risk an audit by not reporting the "use tax" due.

        In fact, I have a feeling the Illinois government will be looking for things like this. The only way the above would work, IMHO, is if you actually set up residency in the state you will have your account set up in.

        Or perhaps have your relative set up the Amazon account, collect the income and give it to you. This is also thin ice if the income is large enough.
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        • Profile picture of the author remodeler
          Originally Posted by mott View Post

          Well, I feel if this bill passes, and as a result you lose your Amazon account, and you try one of the above methods, you are asking for trouble. You would still have to report your income on your Illinois state tax form, and you will risk an audit by not reporting the "use tax" due.

          In fact, I have a feeling the Illinois government will be looking for things like this. The only way the above would work, IMHO, is if you actually set up residency in the state you will have your account set up in.

          Or perhaps have your relative set up the Amazon account, collect the income and give it to you. This is also thin ice if the income is large enough.
          I would agree. It's easy to give tax advice when it is not affecting you. But if you have ever been through an audit you might have other thoughts. Better yet, talk to your accountant about setting up a mailbox for a dummy address, or using a friends address, etc., and see their reaction. That's why forums are the worst place for getting advice on legal or tax issues. Always seek the advice and guidance of a tax professonal.
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          • Profile picture of the author affenpinscher
            This is just a suggestion and not legal nor financial advice. An alternative is to set up a corporation or LLC in an Amazon-approved state where you are also incorporated. You would have to pay income tax (in some form) to that state but it might be less than Illinois corporate taxes especially with the drastic increase.

            P.S. I bet there aren't even five people in the Warrior family that ever declared and paid 'use' taxes. Right or wrong, it's next to impossible for states to monitor this.
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            • Profile picture of the author mott
              Originally Posted by affenpinscher View Post

              P.S. I bet there aren't even five people in the Warrior family that ever declared and paid 'use' taxes. Right or wrong, it's next to impossible for states to monitor this.
              LOL I bet there isn't one. In fact, I bet there isn't one from Illinois who even knew this tax existed before this bill came up.

              BTW would anyone like some snow?
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              • Profile picture of the author ce2gain
                It has to get pretty complicated to use a friend's address in another state or a PO Box when Amazon sends you a 1099 at the end of the year (if you make over $600 that year). That 1099 will go to the IRS as well, and it will show the other address on it. That has got to send up a red flag for audit.

                It sound like the LLC has some possibilities, but I'd definitely check with my accountant about it. If this bill passes, I've thought of just transferring my domains with Amazon links on them to a family member, letting them get an Amazon affiliate account to change the links, and figure out a way to share the income. Remember that they will have to pay income tax in their state. It all gets very messy, and I'm not sure it's worth it. I think I'm better off putting my efforts into other sources of online income.

                There is also the potential to sell my Amazon sites to someone who lives in an "Amazon-friendly" state.
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      • Profile picture of the author nubchai
        Originally Posted by Michael Franklin View Post

        Abolutely! In fact I tell people that to circumvent this nonsense:

        1) Go with a friend or relative (that you trust) in an Amazon-approved state

        OR

        2) Setup an address at a UPS store in an Amazon-approved state

        It works!
        Michael,

        How do you get your Amazon affiliate payments? To the UPS store? Do they then forward the mail to you?I've never used them. Thanks
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  • Profile picture of the author mott
    Here is a commentary from someone who is in favor of this bill.

    Governor Quinn: Forget Amazon.com. Sign The Bill, Raise My Sales Tax
    Signature

    Rich

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    • Profile picture of the author remodeler
      Originally Posted by mott View Post

      Here is a commentary from someone who is in favor of this bill.

      Governor Quinn: Forget Amazon.com. Sign The Bill, Raise My Sales Tax
      Thanks for the link. Thinking that Amazon is bluffing is just plain silly. They've proven they are not by terminating affiliates in other states that passed the same legislation.

      Mom and pop stores believing that this bill will somehow level the playing field and help them generate tons of added sales is a dream. It gets used as an excuse to make themselves feel better and avoid taking responsibility for the real reason their business is not prospering...themselves.

      Shopping online has exploded year after year for many reasons, and it is not going away due to a state sales tax.
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      • Profile picture of the author geekgold
        1- It looks like Amazon is bluffing, based on precedent. They get thousands of free lobbyists that way, why not?!

        2 - Anyone thinking of skirting this by setting up an LLC out of state, read this again:

        HB 3659 would require out-of-state retailers to collect Illinois sales tax if customers were referred by any website operated by Illinois businesses or residents.


        As some have suggested, operating from a different state / different country could be initially set up without too many problems. BUT - Amazon would be putting themselves at risk for tax evasion if they don't take steps to police their affiliates' location - geography of your IP address as a start. Otherwise, they'd be blatantly negligent & pay huge fines.

        Honestly I think it all comes down to how the pricing is presented to customers. If joe blow in texas doesn't know that IL sales tax is figured in to his <buy now> price, he'll still buy. If Amazon, etc spells this out for him, I can already hear him clicking the <back> button, can't you?
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        • Profile picture of the author Dave Rodman
          Banned
          Originally Posted by geekgold View Post

          1- It looks like Amazon is bluffing, based on precedent. They get thousands of free lobbyists that way, why not?!

          2 - Anyone thinking of skirting this by setting up an LLC out of state, read this again:

          HB 3659 would require out-of-state retailers to collect Illinois sales tax if customers were referred by any website operated by Illinois businesses or residents.


          As some have suggested, operating from a different state / different country could be initially set up without too many problems. BUT - Amazon would be putting themselves at risk for tax evasion if they don't take steps to police their affiliates' location - geography of your IP address as a start. Otherwise, they'd be blatantly negligent & pay huge fines.

          Honestly I think it all comes down to how the pricing is presented to customers. If joe blow in texas doesn't know that IL sales tax is figured in to his <buy now> price, he'll still buy. If Amazon, etc spells this out for him, I can already hear him clicking the <back> button, can't you?
          They say out-of-state RETAILERS i.e. Amazon. If the company is setup in NV, then it's a NV company as far as Amazon is concerned. It's not their responsibility.

          And they aren't bluffing. Why would they? The advantage they get from not having to charge tax in IL FAR OUTWEIGHS having affiliates there. Esp since they're counting on affiliates to figure out a way around it.
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        • Profile picture of the author remodeler
          Originally Posted by geekgold View Post

          1- It looks like Amazon is bluffing, based on precedent. They get thousands of free lobbyists that way, why not?!
          What precedent? The only precedent they've shown is to pull out of every state that has passed these laws. How is that bluffing?
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  • Profile picture of the author remodeler
    Here is a link to a podcast that PMA director Rebecca Madigan was on today.

    This call is very informative and filled with information on what the Nexus tax bills are all about and updates in regards to all of the states being affected, including CT and CA. It is explained in a way that everyone can easily understand.

    If you are not quite sure as to what this is all about, or whether or not your state has the potential of being affected by this... then this call is worth listening to.

    PMA Industry Report: Legislative Update

    As for an update here in IL. According to Rebecca, things will be coming to a head in the next 2 weeks. A meeting with the Governors chief of staff is lined up for Feb 8th I believe she said, with several big affiliates including the head of ShareASale, FatWallet and others in on the meeting.
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  • Profile picture of the author Bruce NewMedia
    So, just wondered if there has been any update on Governor Quinn's decision whether to sign the bill or not?
    _____
    Bruce
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    • Profile picture of the author mott
      Originally Posted by brucerby View Post

      So, just wondered if there has been any update on Governor Quinn's decision whether to sign the bill or not?
      _____
      Bruce
      Nope. However there is a similar situation in Texas, where the state wants $269 billion from Amazon in sales taxes, from Amazon sales to Txas residents. In this case Amazon has a distribution center in Texas, so that is considered a presence (to the Texas governor). Amazon will not pay the taxes and will apparently close the distribution center instead. I don't know what will happen with Texas affiliates.
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      • Profile picture of the author GarrieWilson
        Originally Posted by mott View Post

        Nope. However there is a similar situation in Texas, where the state wants $269 billion from Amazon in sales taxes, from Amazon sales to Txas residents. In this case Amazon has a distribution center in Texas, so that is considered a presence (to the Texas governor). Amazon will not pay the taxes and will apparently close the distribution center instead. I don't know what will happen with Texas affiliates.
        Amazon doesn't have one in TX. "Amazon Shipping LLC" does. Amazon subcontracts shipping to a company they own but isn't them.

        But they are closing it instead of fighting about the technicality.
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        • Profile picture of the author Robert Oliver
          119 employees will be out of a job soon.

          Major expansion into Texas just came to a halt.

          I hope this does not effect us marketers. I will

          be watching closely for the outcome.

          The Governor said the Comptroller acted on her

          own and is looking into the matter. Maybe too late.

          Robert Oliver
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    • Profile picture of the author remodeler
      Originally Posted by brucerby View Post

      So, just wondered if there has been any update on Governor Quinn's decision whether to sign the bill or not?
      _____
      Bruce
      From what I've been reading, the presidents of ShareASale, Fat Wallet and and some other companies all met a week ago with the Gov's chief of staff. They were told that no decision was expected until the March 11th deadline.
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  • Profile picture of the author ce2gain
    In IL we have a few of the big online "deal" sites based here that would be hit hard by this bill. Fat Wallet and Coupon Cabin have already stated they would move out of state if the bill passes. I've read that Groupon (also in IL) is looking into the impact on their business. Most of their deals are local, but some are online companies.

    This is an interesting letter written by Barnes and Noble to all Amazon affiliates yesterday:

    Barnes & Noble Booksellers

    They are inviting Amazon affiliates to join their affiliate program. This could be an alternative to those of us who primarily market books. The problem I see is that the reader could just go to B&N's bookstore to buy it, and Amazon typically has better prices on books than B&N in my experience.
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  • Profile picture of the author ce2gain
    ShareASale just sent a letter today asking for Illinois residents to help oppose HB 3659. They sent this link:

    http://shrsl.com/?~oqb (It links to TechAmerica)

    You can briefly fill in some text, and it will automatically be sent to Governor Quinn's office. If you haven't already voiced your opposition, this is a quick and easy way to do it. I also think it wouldn't hurt to do it again even if you contacted his office a few weeks ago.
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    • Profile picture of the author remodeler
      Originally Posted by ce2gain View Post

      ShareASale just sent a letter today asking for Illinois residents to help oppose HB 3659. They sent this link:

      http://shrsl.com/?~oqb (It links to TechAmerica)

      You can briefly fill in some text, and it will automatically be sent to Governor Quinn's office. If you haven't already voiced your opposition, this is a quick and easy way to do it. I also think it wouldn't hurt to do it again even if you contacted his office a few weeks ago.
      Thanks for that link. I just filled it out.

      Also just seen a story that Texas has now introduced a Nexus bill in their legislature as well.
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      • Profile picture of the author mott
        The bill has been signed today by Gov. Quinn. The law is effective immediately.
        Signature

        Rich

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        • Profile picture of the author Julie McElroy
          Man! I know that is going to hurt A LOT of people. Living in Colorado, I feel the pain as well! Luckily, I base a very small percent on Amazon commissions - not very lucrative for me anyhow.... I just wrote a blog post on it - feel free to comment!
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  • Profile picture of the author steveblum
    Gov. Quinn just signed HB3659 into law. Now it's just a matter of time before Amazon and others say goodbye to all their a Illinois affiliates.
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    • Profile picture of the author Rob Howard
      Originally Posted by steveblum View Post

      Now it's just a matter of time before Amazon and others say goodbye to all their a Illinois affiliates.
      Which will probably happen immediately. At the latest, it's July 1st, when collection of sales tax needs to begin.

      Rob
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    • Profile picture of the author BloggingPro
      It's fine. I live in Colorado, right near the border between New Mexico and Colorado in fact. Amazon dumped Colorado affiliates last year, yet I still get payments--to a bank account in New Mexico.

      Some people are even starting to register their businesses other states to get around this, which also provides several tax benefits (especially if you register your business in the state of Nevada!)
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      • Profile picture of the author Rob Howard
        Originally Posted by BloggingPro View Post

        It's fine. I live in Colorado, right near the border between New Mexico and Colorado in fact. Amazon dumped Colorado affiliates last year, yet I still get payments--to a bank account in New Mexico.

        Some people are even starting to register their businesses other states to get around this, which also provides several tax benefits (especially if you register your business in the state of Nevada!)
        Indeed, I'm just moving. I hate this state anyway.

        And I know a lot of the big coupon sites are moving too.

        Rob
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      • Profile picture of the author remodeler
        Originally Posted by BloggingPro View Post

        It's fine. I live in Colorado, right near the border between New Mexico and Colorado in fact. Amazon dumped Colorado affiliates last year, yet I still get payments--to a bank account in New Mexico.

        Some people are even starting to register their businesses other states to get around this, which also provides several tax benefits (especially if you register your business in the state of Nevada!)
        I hope you have a 3rd option because HB 102 is currently going through the NM legislature to create a nexus tax.

        Just going through the current list of states with this type of tax in their legislature brings up several:

        AZ - CA - CT - TX - VT - AR - MN - RI - HI - SD and NM. Probably be more soon as well.
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    • Profile picture of the author remodeler
      I believe Amazon said they will terminate associates once the bill was signed into law. Notices probably being prepared at the moment. Not a good day, but predictable with this state.
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    • Profile picture of the author GarrieWilson
      IL is in such a financial mess they have no clue how to fix it. It will be the next Detroit.
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      • Profile picture of the author Rob Howard
        Originally Posted by GarrieWilson View Post

        IL is in such a financial mess they have no clue how to fix it. It will be the next Detroit.
        Did you hear the one of the business owner who paid too much in taxes (like 25,000 bucks) and the state refused to pay him the refund?

        Yeah - great state ol' Illinois.

        Rob
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        • Profile picture of the author BloggingPro
          Originally Posted by ccmusicman View Post

          Did you hear the one of the business owner who paid too much in taxes (like 25,000 bucks) and the state refused to pay him the refund?

          Yeah - great state ol' Illinois.

          Rob
          Um, not to fuel the off-topic discussion, but how in the hell can they do that? Wouldn't that just open themselves up to a lawsuit. I could see TAX lawyers lining up at your front door for a case like that.

          I would request interest be tacked on too!

          EDIT: I guess he could just claim it as a loss next year right?
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          • Profile picture of the author iAmNameLess
            Originally Posted by BloggingPro View Post

            Um, not to fuel the off-topic discussion, but how in the hell can they do that? Wouldn't that just open themselves up to a lawsuit. I could see TAX lawyers lining up at your front door for a case like that.

            I would request interest be tacked on too!

            EDIT: I guess he could just claim it as a loss next year right?
            LMAO... Illinois does a lot of things that they aren't supposed to do. That doesn't surprise me at all, we are literally the MOST corrupt state in the country.
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          • Profile picture of the author Rob Howard
            Originally Posted by BloggingPro View Post

            Um, not to fuel the off-topic discussion, but how in the hell can they do that? Wouldn't that just open themselves up to a lawsuit. I could see TAX lawyers lining up at your front door for a case like that.

            I would request interest be tacked on too!

            EDIT: I guess he could just claim it as a loss next year right?
            I'm not sure - I found it on a news site, the guys story. Let me dig it up.

            Here it is:

            http://video.foxnews.com/v/4477406/s...ylist_id=86890

            Enjoy the craziness.

            EDIT: Quote from the above video

            "We've not paid business refunds since the Spring of 2009. That's wrong, but if we don't have the money, we don't have the money." - Mike Klemens Illinois Dept. of Revenue

            Ya know, I would like to just spend my money on whatever, then come tax time be like "Ya know Illinois, I just don't have the money. It's wrong, sure. I need to pay my taxes, but if you don't have the money, you don't have the money."

            Watch them be "OK" with it...

            Rob
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            • Profile picture of the author BloggingPro
              Originally Posted by ccmusicman View Post

              "We've not paid business refunds since the Spring of 2009. That's wrong, but if we don't have the money, we don't have the money." - Mike Klemens Illinois Dept. of Revenue
              That is the craziest thing I have ever heard. But then again I would be real curious to know if he can use it as a "business loss" next year which would considerably lower his tax obligation.
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              • Profile picture of the author Rob Howard
                Originally Posted by BloggingPro View Post

                That is the craziest thing I have ever heard. But then again I would be real curious to know if he can use it as a "business loss" next year which would considerably lower his tax obligation.
                I sure as hell would be. And if they audited, I would just be tell them they already have 23k of my money from last year.

                Rob
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    • Profile picture of the author darrenmonroe
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    • Profile picture of the author iAmNameLess
      AHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

      MAn... I hate illinois, we suck, not only is 90% of the state cornfields, the remainder is chicago + east saint louis which is no good. This just sucks, one of many things that are messed up about our state.

      At least I can say I definitely did not vote for Quinn.

      I'm going to need to move across the river.
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    • Profile picture of the author sarahberra
      What!! Why are so many state governments trying to destroy prosperity? There is nothing wrong with people making money online. Yikes!!
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      • Profile picture of the author BloggingPro
        Originally Posted by sarahberra View Post

        What!! Why are so many state governments trying to destroy prosperity? There is nothing wrong with people making money online. Yikes!!
        Well technically its the affiliate programs that are cutting you off, not the state. The states are changing legislature yes, but its the online merchants who make the decision on whether to support affiliates in those states.
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    • Profile picture of the author Mohammad Afaq
      One after another, I guess it's a matter of time before other states catch up.

      Honestly, I think amazon will have to start dealing with this rather than running away.
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      • Profile picture of the author iAmNameLess
        Originally Posted by Mohammad Afaq View Post

        One after another, I guess it's a matter of time before other states catch up.

        Honestly, I think amazon will have to start dealing with this rather than running away.
        I hope so...

        I would think they would, but really, why should amazon do that, they are perfectly fine without one state. I'm sure they WILL end up dealing with it but until they take enough of a hit, I don't think they will.

        GRR... and the notice of $50-$100 limit on purchases with credit or debit cards, did anyone hear about that?
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      • Profile picture of the author remodeler
        Originally Posted by Mohammad Afaq View Post

        One after another, I guess it's a matter of time before other states catch up.

        Honestly, I think amazon will have to start dealing with this rather than running away.
        They are dealing with it. That is what the NY case is all about. It's headed to the supreme court. But in the meantime they have to drop affiliates from the states that continue to pass the same laws or their case is blown.

        You're right about other states. Looks like many others have current legislation in the works and about to pass. Most likely even accelerate with a bigger state like IL passing and signing this bill.

        As for this corrupt state, I wish Chicage would become a part of Canada.
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        • Profile picture of the author Dave Rodman
          Banned
          This is pretty typical of that sleezeball quinn. I'm sure he knew that abolishing the death penalty in IL will be the lead news story, so might as well just bury the signing of this bill.
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          • Profile picture of the author Rob Howard
            Originally Posted by Dave Rodman View Post

            This is pretty typical of that sleezeball quinn. I'm sure he knew that abolishing the death penalty in IL will be the lead news story, so might as well just bury the signing of this bill.
            Yup - while 9000 affiliates will be scrambling to find ways around the law in some way.

            Oh great state of Illinois.

            So, what do you guys think of Montana (no sales tax at all)? lol

            Rob
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    • Profile picture of the author RyanLeonard
      Originally Posted by steveblum View Post

      Gov. Quinn just signed HB3659 into law. Now it's just a matter of time before Amazon and others say goodbye to all their a Illinois affiliates.
      Join the club- it happened here in NC as well. I haven't found a good alternative yet- I'll let you know if I do though.

      Good Luck!
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    • Profile picture of the author outwest
      Illinois is desperate for money thats why they did it
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  • Profile picture of the author darrenmonroe
    Alright Warriors Your Money is Waiting on You! Who Does Asset Protection / Tax Free Corp Setups?

    Hey with all of the discussion about the illinois changes we are talking about here http://www.warriorforum.com/main-int...ffiliates.html

    We are missing the BIG picture. OPPORTUNITY

    Hey who does asset protection and corp setups in Nevada? There is some money there. Not sure if the law is retro to this year or not but the point is that this is a opportunity to reposition.

    Remember the old Russian proverb because we ALL live by it entrepreneurs
    "Learn the Rules so you can break them properly"

    Everytime they make a law the quickest adjusters will find solutions and make a fortune.
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  • Profile picture of the author darrenmonroe
    OK so like i just posted HERE whats the solution? Hey some of you have some money coming...a LOT of it. EDIT: hey who has assett companies?
    Who knows asset protection? There is serious opportunity here.


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  • Profile picture of the author mott
    I got an email from Gov. Quinn about this, because I had emailed him opposing this bill. Here is the email for what it's worth:

    -----------

    Dear Richard,

    Today I have signed House Bill 3659, which requires all companies doing business in Illinois to collect and remit legally required sales taxes.

    House Bill 3659, The Main Street Fairness Bill, was a bipartisan initiative that passed both houses of the General Assembly with overwhelming support. This law will require all online retailers who connect with an affiliate in Illinois to collect sales tax on customer purchases and remit it to the Illinois Department of Revenue (IDOR). Illinois currently collects sales tax revenue from the more than 20,000 retailers with physical locations in the state, including online and catalog sales from these vendors.

    Illinois' main street businesses are critical to ensuring our long-term economic stability, which is why they must be able to compete with every company doing business online in Illinois. This law will put Illinois-based businesses on a level playing field, protect and create jobs and help us continue to grow in the global marketplace.

    Per my request, the Alliance of Main Street Fairness (AMSF) has begun a website (www. standwithmainstreet .com) to help Illinois affiliates expand their customer bases. The Illinois Department of Commerce and Economic Opportunity (DCEO) will partner with the Illinois Retail Merchants Association and AMSF to provide growth opportunities, foster an environment to create more Illinois jobs and provide online shopping consumers with greater opportunities to save money.

    Thank you for reaching out to me on this matter. Please feel free to contact me in the future with your questions. My office phone number is (217) 782-0244 or (312) 914-2121.

    Sincerely,


    Pat Quinn
    Governor
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    • Profile picture of the author J23
      Originally Posted by mott View Post

      I got an email from Gov. Quinn about this, because I had emailed him opposing this bill. Here is the email for what it's worth:

      -----------

      Dear Richard,

      Today I have signed House Bill 3659, which requires all companies doing business in Illinois to collect and remit legally required sales taxes.

      House Bill 3659, The Main Street Fairness Bill, was a bipartisan initiative that passed both houses of the General Assembly with overwhelming support. This law will require all online retailers who connect with an affiliate in Illinois to collect sales tax on customer purchases and remit it to the Illinois Department of Revenue (IDOR). Illinois currently collects sales tax revenue from the more than 20,000 retailers with physical locations in the state, including online and catalog sales from these vendors.

      Illinois' main street businesses are critical to ensuring our long-term economic stability, which is why they must be able to compete with every company doing business online in Illinois. This law will put Illinois-based businesses on a level playing field, protect and create jobs and help us continue to grow in the global marketplace.

      Per my request, the Alliance of Main Street Fairness (AMSF) has begun a website (www. standwithmainstreet .com) to help Illinois affiliates expand their customer bases. The Illinois Department of Commerce and Economic Opportunity (DCEO) will partner with the Illinois Retail Merchants Association and AMSF to provide growth opportunities, foster an environment to create more Illinois jobs and provide online shopping consumers with greater opportunities to save money.

      Thank you for reaching out to me on this matter. Please feel free to contact me in the future with your questions. My office phone number is (217) 782-0244 or (312) 914-2121.

      Sincerely,


      Pat Quinn
      Governor
      Yep, I got the same email from him. Gotta love how he makes it out like this is a positive change lol...

      What I'm wondering is if all online merchants are going to start following the same thing Amazon is doing and cutting off all their affiliates. What about all the merchants on CJ that some of us use?

      I guess we will just wait and see. I know if more merchants start cutting us off, I'm for sure getting out of the state or incorporating elsewhere.
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  • Profile picture of the author Rob Howard
    Yeah! One hand, start a website about marketing (basically), while on the other kill your source of revenue.

    Wal-Mart and other physical stores don't have the inventory or the product selection Amazon, Overstock and others have. It's a joke, really.

    But hey, the Governor started a website to help you make more money, so it's all good, right?

    Rob
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  • Profile picture of the author Bruce NewMedia
    You guys are fast:-)

    I just got the email from the 'esteemed' Gov. and planned to post it.

    This is why IL is such a mess. 66% increase in income tax, now this, and I just saw where they are looking at taxing retirement income over a certain threshold as well.
    Illinois government takes care of itself,.... the businesses, the taxpayers, be damned.

    Note: Like Rob, I have been planning my relocation for some time. Crappy weather, high taxes, slow growth, an anti-business climate are enough reasons to go.
    _____
    Bruce
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  • Profile picture of the author ce2gain
    I just got the Amazon letter as well. Here it is for anyone who wants to read it:

    Amazon.com
    Hello,

    For well over a decade, the Amazon Associates Program has worked with thousands of Illinois residents. Unfortunately, a new state tax law signed by Governor Quinn compels us to terminate this program for Illinois-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers - including but not limited to those referred by Illinois-based affiliates like you - even if those retailers have no physical presence in the state.

    We had opposed this new tax law because it is unconstitutional and counterproductive. It was supported by national retailing chains, most of which are based outside Illinois, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that its enactment forces this action.

    As a result of the new law, contracts with all Illinois affiliates of the Amazon Associates Program will be terminated and those Illinois residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, or SmallParts.com. Please be assured that all qualifying advertising fees earned prior to April 15, 2011 will be processed and paid in full in accordance with the regular payment schedule. Based on your account closure date of April 15, 2011, any final payments will be paid by July 1, 2011.

    You are receiving this email because our records indicate that you are a resident of Illinois. If you are not currently a permanent resident of Illinois, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state after April 15, please contact us for reinstatement into the Amazon Associates Program.

    To be clear, this development will only impact our ability to continue the Associates Program in Illinois, and will not affect the ability of Illinois residents to purchase online at www.amazon.com from Amazon's retail business.

    We have enjoyed working with you and other Illinois-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to Illinois residents.

    Regards,

    The Amazon Associates Team

    My husband and I planned to move out of state this summer, but he now has a new job which means we need to be committed here for at least another 2 years. I'm looking into affiliate alternatives. I'm sure I'll be getting a similar letter from Share A Sale as well. I really do hate this state, but in this economy, you just can't leave a good paying job.

    Anyone have any affiliate alternatives? Adsense is looking pretty good right now.
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    • Profile picture of the author millardsc
      This is surely a disturbing trend in the IM business. I fear my state of Virginia may not be far behind.

      millardsc
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  • Profile picture of the author energytimes
    I just got the letter as well now what do we do?
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    • Profile picture of the author mott
      Originally Posted by energytimes View Post

      I just got the letter as well now what do we do?
      Well here are the choices:
      1. Move to another state. Of course the new state may enact the same law. Plus there is the expense & bother of moving.
      2. Find someone in another state to be an associate. Of course it has to be someone you trust, who would send you the payments, and would report on their income tax the income you received (and you'd pay their taxes).
      3. Create an LLC and use that. In Illinois this is very expensive to set up, and I'm not sure if this will work. You might still have to pay the use tax, I really don't know.
      4. Only be an affiliate of companies that collect the sales tax (such as Wal Mart, Barnes & Noble, etc). Though it's a bad option, it is the best one I think.
      5. Use Amazon etc. on your site, but don't collect any commission on sales. I don't know if it is a good choice, but it is there.

      I don't know of any other option.
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      Rich

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      • Profile picture of the author MrToken
        I just had my cousin open me a ups store box in Ohio.
        Small Mailbox:
        3 months- $42
        6 months- $78
        12 months- $144


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      • Profile picture of the author nubchai
        Originally Posted by mott View Post

        Well here are the choices:
        1. Move to another state. Of course the new state may enact the same law. Plus there is the expense & bother of moving.
        2. Find someone in another state to be an associate. Of course it has to be someone you trust, who would send you the payments, and would report on their income tax the income you received (and you'd pay their taxes).
        3. Create an LLC and use that. In Illinois this is very expensive to set up, and I'm not sure if this will work. You might still have to pay the use tax, I really don't know.
        4. Only be an affiliate of companies that collect the sales tax (such as Wal Mart, Barnes & Noble, etc). Though it's a bad option, it is the best one I think.
        5. Use Amazon etc. on your site, but don't collect any commission on sales. I don't know if it is a good choice, but it is there.

        I don't know of any other option.
        Being an affiliate of Walmart isn't very appealing. Amazon has a vast range of products and reviews and is trusted by consumers. So conversions are decent. Walmart? Ugh

        I must admit to being confused by the out of state LLC approach. You set up an LLC in Delaware for example. You'd have to get a Delaware PO box. So you create a website and apply to be an Amazon affiliate. I guess you'd apply in the name of the LLC. Then you continue selling product. Time comes for your first commission check. What do they do? Send it to your UPS PO box? How does the check get to you? O.k. so maybe you set up a Delaware bank account. The check goes there as direct deposit. But as someone else pointed out you have to treat the funds as belonging to the LLC. So to use the funds it would be smart to pay yourself a commission from each deposit. Then at tax time you file federal forms for the LLC and pay taxes from what hopefully are profits. But you'd have to be listed as one of the officers of the LLC. It's rather convoluted.

        I think the Illinois law will eventually be reversed. Not sure I want to risk being blackballed by Amazon for doing an end run around Illinois tax law and Amazon policy.
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        • Profile picture of the author mott
          Originally Posted by nubchai View Post

          I think the Illinois law will eventually be reversed. Not sure I want to risk being blackballed by Amazon for doing an end run around Illinois tax law and Amazon policy.
          That's another alternative, to wait it out. The law will either be reversed by the courts, or state legislature will see they are losing money and reverse the law. I hope one of those happens anyway.
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        • Profile picture of the author airpr23
          Originally Posted by nubchai View Post

          Being an affiliate of Walmart isn't very appealing. Amazon has a vast range of products and reviews and is trusted by consumers. So conversions are decent. Walmart? Ugh

          I must admit to being confused by the out of state LLC approach. You set up an LLC in Delaware for example. You'd have to get a Delaware PO box. So you create a website and apply to be an Amazon affiliate. I guess you'd apply in the name of the LLC. Then you continue selling product. Time comes for your first commission check. What do they do? Send it to your UPS PO box? How does the check get to you? O.k. so maybe you set up a Delaware bank account. The check goes there as direct deposit. But as someone else pointed out you have to treat the funds as belonging to the LLC. So to use the funds it would be smart to pay yourself a commission from each deposit. Then at tax time you file federal forms for the LLC and pay taxes from what hopefully are profits. But you'd have to be listed as one of the officers of the LLC. It's rather convoluted.

          I think the Illinois law will eventually be reversed. Not sure I want to risk being blackballed by Amazon for doing an end run around Illinois tax law and Amazon policy.
          Yes and no. I live in California which has insane anti-business tax laws. Years ago I incorporated in Nevada. The key is just to keep the money in the corporation and live through the corporation. It's done all the time and is totally legal. The house and car I have are owned through 2 separate corporations in Nevada. The key is to own nothing but control everything. Since I live in California, I only have to pay california taxes on the money I pay myself as a contractor but I get to decide how much I want to pay myself. So yes you have to treat the funds as belonging to the LLC but you get to decide what the LLC needs. If the LLC needs a new car, then the LLC gets a new car. Which by the way is owned by the LLC, yet controlled by you. It's not illegal at all and major companies do it all the time to reduce taxes and avoid lawsuits. For example the car I have is owned by ABC, LLC, and if I hit someone. They sue me and the corporation that owns the car. All they can get is the car and anything I personally own under my name, which by the way is practically nothing. So my businesses, investments and everything else that has it's own LLC are protected. Where most people have everything under their personal name so if they get sued and lose, they lose everything. Honestly any person running a business should have some sort of corporation setup to protect themselves and their belongings.

          A couple key things here. Do not incorporate on your own unless you totally understand the corporate and tax laws. Most people have no idea what they are doing and totally end up screwing themselves over. You should find a really good corporate lawyer and CPA to setup and manage everything for you. Setting up a corporation is just the beginning, in order for your corporation to be legit you have to have certain things kept up to date. If you need help finding a corporate lawyer or CPA, PM me I know some really good ones. Hope this helps but don't incorporate yourself unless you know what you are doing. Get good legal help!

          Oh and one other thing, I would think it would be possible to setup your business in another state, though an LLC or S corp or whatever, while still living in Illinois. I don't see why Amazon would terminate your contract then unless it's against their terms of service but it's something that is done all the time. Then you could just pay yourself through a 1099 (individual contractor) through the LLC which was formed in a different state, and pay your state taxes from what your LLC paid you, as an individual. Hope that makes sense...
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          • Profile picture of the author nubchai
            Originally Posted by airpr23 View Post

            Yes and no. I live in California which has insane anti-business tax laws. Years ago I incorporated in Nevada. The key is just to keep the money in the corporation and live through the corporation. It's done all the time and is totally legal. The house and car I have are owned through 2 separate corporations in Nevada. The key is to own nothing but control everything. Since I live in California, I only have to pay california taxes on the money I pay myself as a contractor but I get to decide how much I want to pay myself. So yes you have to treat the funds as belonging to the LLC but you get to decide what the LLC needs. If the LLC needs a new car, then the LLC gets a new car. Which by the way is owned by the LLC, yet controlled by you. It's not illegal at all and major companies do it all the time to reduce taxes and avoid lawsuits. For example the car I have is owned by ABC, LLC, and if I hit someone. They sue me and the corporation that owns the car. All they can get is the car and anything I personally own under my name, which by the way is practically nothing. So my businesses, investments and everything else that has it's own LLC are protected. Where most people have everything under their personal name so if they get sued and lose, they lose everything. Honestly any person running a business should have some sort of corporation setup to protect themselves and their belongings.

            A couple key things here. Do not incorporate on your own unless you totally understand the corporate and tax laws. Most people have no idea what they are doing and totally end up screwing themselves over. You should find a really good corporate lawyer and CPA to setup and manage everything for you. Setting up a corporation is just the beginning, in order for your corporation to be legit you have to have certain things kept up to date. If you need help finding a corporate lawyer or CPA, PM me I know some really good ones. Hope this helps but don't incorporate yourself unless you know what you are doing. Get good legal help!

            Oh and one other thing, I would think it would be possible to setup your business in another state, though an LLC or S corp or whatever, while still living in Illinois. I don't see why Amazon would terminate your contract then unless it's against their terms of service but it's something that is done all the time. Then you could just pay yourself through a 1099 (individual contractor) through the LLC which was formed in a different state, and pay your state taxes from what your LLC paid you, as an individual. Hope that makes sense...
            Thanks Airpr that's very helpful. It does look like Wyoming allows you to set up a corp or LLC without living in Wyoming. So if you also set up an LLC and a bank account in Wyoming you could use the LLC to sign up as an affiliate. There are various ways to establish an address too. UPS PO boxes are brought up a lot. It's definitely an option. thanks again. Sandy
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            • Profile picture of the author nubchai
              Originally Posted by nubchai View Post

              Thanks Airpr that's very helpful. It does look like Wyoming allows you to set up a corp or LLC without living in Wyoming. So if you also set up an LLC and a bank account in Wyoming you could use the LLC to sign up as an affiliate. There are various ways to establish an address too. UPS PO boxes are brought up a lot. It's definitely an option. thanks again. Sandy
              One other question. LLCs are pass throughs. When tax time rolls around you normally add the LLC income on a schedule attached to your personal income tax. That would also mean attaching the Amazon 1099 form. I can't remember if a 1099 also has to be attached to the state tax form. If you live in Illinois then that would be a red flag.

              Am I missing something?

              Sandy
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              • Profile picture of the author airpr23
                Originally Posted by nubchai View Post

                One other question. LLCs are pass throughs. When tax time rolls around you normally add the LLC income on a schedule attached to your personal income tax. That would also mean attaching the Amazon 1099 form. I can't remember if a 1099 also has to be attached to the state tax form. If you live in Illinois then that would be a red flag.

                Am I missing something?

                Sandy
                No LLC's are not pass throughs, they are a legal entity. For example, when you setup your LLC in Wyoming which is a great state to incorporate in by the way. But anyways, when you incorporate in Wyoming, the corporation is a whole new business entity that has nothing to do with you at all. So the corporation would have to pay corporate taxes, have it's own separate back account, build business credit, etc. All you would be doing is controlling and managing the corporation. So you and the corporation would file separate tax returns.

                So what you would do is either become an employee of the corporation and pay yourself a salary. Then you would have to file taxes as an employee of the corporation. That's how all the Wall Street CEO's are able to pay themselves 50 million a year. Or you could become an independent contractor who does contract work for the corporation and you could pay yourself whatever you wanted. It's a little more complex but that's basically how it works. So the state of Illinois would just see you as an individual contractor doing contract work for a corporation based in Wyoming.And you personally would have to file a 1099. The corporation would file for taxes in whatever state it was formed in. So when tax time comes both you and the corporation would be dealt with separately. By the way in Wyoming and Nevada it is illegal for those states to reveal board members and trustees of any corporation formed in their state, which is why everyone incorporates in those 2 states. So no red flags, hope that answers it.

                And the Amazon tax form would have nothing to do with you personally because you are just doing independent contract work for some corporation in Wyoming. When the corporation files for taxes in Wyoming then yes the Amazon form would be attached but it would have nothing to do with Illinois.
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                • Profile picture of the author nubchai
                  Originally Posted by airpr23 View Post

                  No LLC's are not pass throughs, they are a legal entity. For example, when you setup your LLC in Wyoming which is a great state to incorporate in by the way. But anyways, when you incorporate in Wyoming, the corporation is a whole new business entity that has nothing to do with you at all. So the corporation would have to pay corporate taxes, have it's own separate back account, build business credit, etc. All you would be doing is controlling and managing the corporation. So you and the corporation would file separate tax returns.

                  So what you would do is either become an employee of the corporation and pay yourself a salary. Then you would have to file taxes as an employee of the corporation. That's how all the Wall Street CEO's are able to pay themselves 50 million a year. Or you could become an independent contractor who does contract work for the corporation and you could pay yourself whatever you wanted. It's a little more complex but that's basically how it works. So the state of Illinois would just see you as an individual contractor doing contract work for a corporation based in Wyoming.And you personally would have to file a 1099. The corporation would file for taxes in whatever state it was formed in. So when tax time comes both you and the corporation would be dealt with separately. By the way in Wyoming and Nevada it is illegal for those states to reveal board members and trustees of any corporation formed in their state, which is why everyone incorporates in those 2 states. So no red flags, hope that answers it.

                  And the Amazon tax form would have nothing to do with you personally because you are just doing independent contract work for some corporation in Wyoming. When the corporation files for taxes in Wyoming then yes the Amazon form would be attached but it would have nothing to do with Illinois.
                  Well if you read this link How LLCs Are Taxed - Free Legal Information - Nolo it doessay LLCs are pass throughs and any taxable incomeisreported on the returnsofthe individual owner or owners. I do understand basically payingyourself a salary or commission (whatever you'd want to call it). But it looks like sole owner LLCs are treated as sole proprietorships which I've formed in the past. The income there is reported on a schedule attached toyour personal income taxes. SoI'm still confusedon how and LLC would help. A C corp would work because it has its own separate identity.
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                  • Profile picture of the author airpr23
                    Originally Posted by nubchai View Post

                    Well if you read this link How LLCs Are Taxed - Free Legal Information - Nolo it doessay LLCs are pass throughs and any taxable incomeisreported on the returnsofthe individual owner or owners. I do understand basically payingyourself a salary or commission (whatever you'd want to call it). But it looks like sole owner LLCs are treated as sole proprietorships which I've formed in the past. The income there is reported on a schedule attached toyour personal income taxes. SoI'm still confusedon how and LLC would help. A C corp would work because it has its own separate identity.
                    Yeah exactly, like I said you need a good corporate attorney to form and structure your corporation. Sole owner LLC's are treated as sole proprietorships depending but that's why you can add a trustee. Or pay your kid, or family member a small salary like $100 a month to wash the corporate car or something. No actually LLC's can be taxed as C corp's or S corps. It just depends in which way you want your LLC to be taxed, which is another huge advantage. LLC's can change corporate structure to meet your needs.

                    If you want I can give you website link to a very good corporate attorney, not sure if I can post it here. I make no commission or anything from it. I just think it would help because I know the basics to incorporating but I'm no corporate attorney. So I think speaking with a professional who actually knows what applies to your state and can get into actual details, would be more beneficial. Plus he has a ton of info on his site about corporations. Or just PM me.
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                    • Profile picture of the author nubchai
                      Originally Posted by airpr23 View Post

                      Yeah exactly, like I said you need a good corporate attorney to form and structure your corporation. Sole owner LLC's are treated as sole proprietorships depending but that's why you can add a trustee. Or pay your kid, or family member a small salary like $100 a month to wash the corporate car or something. No actually LLC's can be taxed as C corp's or S corps. It just depends in which way you want your LLC to be taxed, which is another huge advantage. LLC's can change corporate structure to meet your needs.

                      If you want I can give you website link to a very good corporate attorney, not sure if I can post it here. I make no commission or anything from it. I just think it would help because I know the basics to incorporating but I'm no corporate attorney. So I think speaking with a professional who actually knows what applies to your state and can get into actual details, would be more beneficial. Plus he has a ton of info on his site about corporations. Or just PM me.
                      Air

                      Thanks. I'll zap you a PM

                      Sandy
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  • Profile picture of the author BeechHill
    This has been going on for a few years now and is just beginning to really snow ball as states look to pick up lost revenue by any means. As I’ve stated else ware, this movement won’t slow down as more purchases are made online which have cut out state revenue. Amazon already knows this.

    I wouldn’t count on setting up a corporation in another state to evade it either, only to have the whole program pulled out from underneath you when it soon reaches a point for Amazon to deep-six the whole national affiliate program.

    Many of the alternatives stink in terms of product and payout and they will most likely get caught up in this tax legislation as well. I’d say ClickBank and CJ have something to worry about too.
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  • Profile picture of the author George Sepich
    Gov. Quinn just ended the death penalty in Illinois, so I guess he wants to kill some busnesses instead.

    George
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  • Profile picture of the author Bruce NewMedia
    Maybe some of you can chime in as I still (hits head with hammer) don;t get it.

    Is it ONLY the matter of where you claim residence that matters?

    What exactly determines residency then?

    Why do you need the LLC or standard Corp? (a full corp identity is a lot of work to maintain, btw) Does where you have a bank acct matter?
    Also, if you reside in a state with no state income tax, how would state even know you had an Amazon business, or care?

    I know we're not legal experts here, but I'm still not getting the methods?
    _____
    Bruce
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    • Profile picture of the author airpr23
      Originally Posted by brucerby View Post

      Maybe some of you can chime in as I still (hits head with hammer) don;t get it.

      Is it ONLY the matter of where you claim residence that matters?

      What exactly determines residency then?

      Why do you need the LLC or standard Corp? (a full corp identity is a lot of work to maintain, btw) Does where you have a bank acct matter?
      Also, if you reside in a state with no state income tax, how would state even know you had an Amazon business, or care?

      I know we're not legal experts here, but I'm still not getting the methods?
      _____
      Bruce


      Ok the LLC's and corporations give you the ability to form a business pretty much anywhere in the country without having to live there. For example, Illinois passes some stupid law and Amazon drops all of it's affiliates in Illinois. So in order for someone in Illinois to still be an affiliate of Amazon, they could leave the state or they could form a corporation in a more business friendly state without having to leave Illinois. The corporation would operate in that state and you could still make money through Amazon. I do not see why Amazon would be against it, since incorporating is a very common thing and legal.

      I don't think the bank account matters.

      Yeah I agree the government really has no way of enforcing certain tax laws, which is why they tried to put the pressure on Amazon.
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  • Profile picture of the author kimberly Aita
    Ugh!! I think I am going to be sick.... maybe I'll be able to figure all of this out tomorrow after I get some sleep but for now it's just one more road block as it seems every time I start to get off the ground with something I get smacked right back down.

    I am almost in tears and hope this does get reversed as it does seem unconstitutional and totally unfair to those of us who have put our hearts into building amazon sites.

    Hopefully my adsense will continue to grow enough to justify keeping my sites up but obviously the amazon commissions are worth a whole lot more.

    Good luck to everyone in any state who is affected by this bs.
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  • Profile picture of the author gchagasteam
    with the states copying each other laws lately, I just hope that Texas don't follow Illinois on that one.
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    • Profile picture of the author James Hussey
      Originally Posted by gchagasteam View Post

      with the states copying each other laws lately, I just hope that Texas don't follow Illinois on that one.
      Sorry - you probably know by now - Texas DID fall in line with these folks...

      All thanks to the work of No New Taxes | Alliance for Main Street Fairness and the lovely Sears, Wal-Mart, Target, Barnes & Noble and lovely politicians who don't balance budgets. Just sayin'.

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      • Profile picture of the author paulie888
        Originally Posted by JamestheJust on Elance View Post

        Sorry - you probably know by now - Texas DID fall in line with these folks...

        All thanks to the work of No New Taxes | Alliance for Main Street Fairness and the lovely Sears, Wal-Mart, Target, Barnes & Noble and lovely politicians who don't balance budgets. Just sayin'.

        So are you saying that Texas has already jumped on the sales tax boat?
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        • Profile picture of the author James Hussey
          Paulie888 -

          Yeah, they just passed legislation. One of the groups, perhaps the main group, behind the movement is in league with the brick-and-mortar affiliate programs like Sears, Wal-Mart, Target and many others.

          These big conglomerates are getting beaten online by Amazon, and are in league to take their competitive edge down one state at a time (through a loophole exploitation you can read about in the thread - calling an affiliate a "physical presence of Amazon, Commission Junction, etc." and thus making such online-only retailers liable for state sales tax)...

          So what they've done is supported the work financially of StandWithMainStreet.com - here's the rub: you can "join" the brick and mortar affiliate programs (and make a lot less money commission-wise), and are invited to do so if you join the StandWithMainStreet.com newsletter.

          At least, that was my experience - I joined their newsletter because they're the biggest voice getting the wheels moving, shutting down AMazon's aff program by forcing their hand (I don't blame Amazon, etc. for their business decisions to shut down the affiliate programs in these states personally).

          Anyway - they have a really serious momentum building here, and the idiotic thing is that they aren't interested in "poor local business owners" like their name implies. They're in league with deep-pocketed businesses (Sears, etc.), and are in league with government as well (another source of funding no doubt).

          But Texas just passed legislation...
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  • Profile picture of the author sherrieb
    This list is from the Amazon site. They may already be paying sales taxes in these states?

    Corporate Headquarters:
    Seattle, WA

    Shared Services Center:
    Las Vegas, NV

    Amazon Web Services:
    Herndon, VA

    Fulfillment Centers:
    Arizona
    Delaware
    Indiana
    Kansas
    Kentucky
    Nevada
    Pennsylvania
    Texas
    Virginia Customer Service Centers:
    North Dakota
    Washington
    West Virginia
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    • Profile picture of the author 4morereferrals
      Originally Posted by sherrieb View Post

      This list is from the Amazon site. They may already be paying sales taxes in these states?

      Corporate Headquarters:
      Seattle, WA

      Shared Services Center:
      Las Vegas, NV

      Amazon Web Services:
      Herndon, VA

      Fulfillment Centers:
      Arizona
      Delaware
      Indiana
      Kansas
      Kentucky
      Nevada
      Pennsylvania
      Texas
      Virginia Customer Service Centers:
      North Dakota
      Washington
      West Virginia
      Looks like the ZON .. has a few locales / facilities in NV already ...

      Nevada Corps ... LLC's and a office facility for compliance ...

      $800 setup [ approx ] and like $50 a month.
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  • Profile picture of the author paulie888
    Originally Posted by gujjuboy View Post

    According to CNBC, Amazon is planning to drop/or has already dropped it's affiliate programs in following states due to new taxes :

    1) Illinois
    2) California (as law makes are planning for a similar sales tax law)
    3) Rhode Island
    4) North Carolina
    5) Colorado
    6) South Carolina (as the law for exemption of sales tax on amazon is expiring soon and they don't want to renew it)

    Also be ready for any sudden sales tax law in your state if it has a huge deficit.

    My advise is to form an LLC in a safe state. Best state to form LLC are nevada, delaware and wyoming. Many are forming in nevada as they don't share any info with irs, 0% sales tax etc..but keep in mind that nevada is currently in hugh deficit and they are planning to introduce a sales tax law. Delaware also has a big state deficit and its laws are more friendly for corporation. Thus i think wyoming is the best option left - friendly rules, no financial information sharing to irs, have a budget surplus (so no chance of a forming a new internet sales tax law) and a safe heaven (everyone knows about nevada and delaware about forming LLC/company but many few know about wyoming).

    Btw, i am not a wyoming attorney.
    This is definitely not good news. What do you think the chances are of Nevada introducing a sales tax law any time soon?

    Paul
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  • Profile picture of the author cweber
    Well all I can say is sweet. Sorry guys but I'm from Canada but these tax changes lately in a lot of states will help to cut down some competition
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    • Profile picture of the author James Hussey
      Cweber - no worries, business is business, if I was in Canada or some other socialist country I'd be doing the jig, too...thing is: this is America. It's stupid.
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  • Profile picture of the author ce2gain
    FYI-

    Performance Marketing Association just today filled a lawsuit against the state of Illinois over the Affiliate Nexus Law.

    PMA vs. State of Illinois | Performance Marketing Association

    "CHICAGO, June 1, 2011 – The Performance Marketing Association (PMA) today filed a lawsuit against the Illinois Department of Revenue, challenging the constitutionality of a newly enacted Illinois law that will be financially devastating to thousands of the state’s small businesses, forcing them to downsize, relocate or close their doors. The PMA’s complaint further demonstrates how the Illinois law discriminates against Internet-based performance marketing, in violation of the federal Internet Tax Freedom Act..."

    It's interesting reading. They seem to be taking the position that the law unfairly targets internet businesses.
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    • Profile picture of the author nushi
      Hey guys

      Just got the very same email from Amazon and I was only just beginning my affiliate career with Amazon. I live in California and this sucks.

      "Hello,

      For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers - including but not limited to those referred by California-based marketing affiliates like you - even if those retailers have no physical presence in the state.

      We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

      As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.

      You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.

      To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.

      We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

      Regards,

      The Amazon Associates Team "
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  • Profile picture of the author ce2gain
    Cook County IL judge just ruled the Nexus law in IL as unconstitutional! This came as a result of the PMA's lawsuit against IL.

    Intelligence Report: Judge takes Illinois' Internet sales tax offline | abc7chicago.com
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  • Profile picture of the author DubDubDubDot
    Back when all of this happened, the brick & mortar retail association behind this law took email addresses of affiliates to suggest "legit" affiliate programs. Maybe I missed some emails, but it appears as though the only program they recommended to me was Sears. Seems kind of odd. As if Sears was behind the whole thing.
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  • Profile picture of the author gg282
    As much as I miss Chicago... (born and raised there), the state is just a mess. As much as I would like to move back, I find Texas a very friendly state for business. This is where I'm staying. In IL. it's ashamed their picking on internet affiliates.
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  • Profile picture of the author txdalgal
    Given the announcement today regarding Amazon and the state of Texas, does this really spell doom for the Texas Amazon affiliates? I'm hoping there is some loophole here.

    Will CJ and others necessarily follow?
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  • Profile picture of the author UncleDearest
    So in Pennsylvania, they informed everyone that this Nexus law would be going into affect in Dec of 2011. There were even some companies who sent the letters to affiliates that they no longer allowed PA affiliates.

    Then PA announced that they were "re-thinking" their decision to enforce so soon and said they are not enforcing until Sept 2012.

    No Amazon letters were sent to it's affiliates. Business as usual.

    Amazon has 4 distribution centers in PA. This makes me think that they might actually pay the tax and keep the PA affiliates as in NY and I think another state.

    Any thoughts on this?
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